$100M Offers - Alex Hormozi  ## Metadata - Author: **Alex Hormozi** - Full Title: $100M Offers - Category: #books ## Highlights - Outsized returns often come from betting against conventional wisdom, and conventional wisdom is usually right. Given a 10 percent chance of a 100 times payoff, you should take that bet every time. But you're still going to be wrong nine times out of ten . . . We all know that if you swing for the fences, you're going to strike out a lot, but you're also going to hit some home runs. The difference between baseball and business, however, is that baseball has a truncated outcome distribution. When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in a while, when you step up to the plate, you can score 1,000 runs. This long-tailed distribution of returns is why it's important to be bold. Big winners pay for so many experiments." — Jeff Bezos ([View Highlight](https://read.readwise.io/read/01hxd51j7mg4aww01avrrvd6n2)) - Do you want to know the secret to sales?” I had never sold anything in my life. I had never even read a book on it. I had just recently learned what the term meant (seriously). I leaned forward, intent to download every syllable he spoke right into my brain. I opened my notepad and stared at him with intent. I was ready for the secret. He looked at me soberly and said: “Make people an offer so good they would feel stupid saying no.” ([View Highlight](https://read.readwise.io/read/01hxd5sd2en2pzpkb75048e3c8)) - No offer? No business. No life. ([View Highlight](https://read.readwise.io/read/01hxdww3bqg8czpcpfb01zg4fn)) - Bad offer? Negative profit. No business. Miserable life. Decent offer? No profit. Stagnating business. Stagnating life. Good offer? Some profit. Okay business. Okay life. Grand Slam Offer? Fantastic profit. Insane business. Freedom ([View Highlight](https://read.readwise.io/read/01hxdwywj68y62b3mdb4k56zya)) - When these models are used in the real world, business owners just barely “get by.” They essentially “buy themselves a job” and work 100 hours a week to avoid working 40. Crappy trade. My guess is that if you’re anything like me, you signed up for something better. ([View Highlight](https://read.readwise.io/read/01hxgv4fh6xba73w99rzgcjjve)) - So, then, what does it take to grow? Thankfully, just three simple things: 1) Get more customers 2) Increase their average purchase value 3) Get them to buy more times That’s it. ([View Highlight](https://read.readwise.io/read/01hxgvg0zhrnyebhke69q9pm1j)) - Tags: #wealth - Commoditized = Price Driven Purchases (race to the bottom) Differentiated = Value Driven Purchases (sell in a category of one with no comparison. Yes, market matters, which I will expound on in the next chapter) ([View Highlight](https://read.readwise.io/read/01hxj0125wq8p2tvnm7f7pkqkf)) - With new technology, he brought the cost per mask below what people could buy them for from China. Within five months he was doing millions per month. Same entrepreneur. Different market. He applied his same skill set to a business he had zero experience in and was able to win. That’s the power of picking the right market. ([View Highlight](https://read.readwise.io/read/01hxmm27rz5hhmk8g68kh2xq96)) - There is a market in desperate need of your abilities. You need to find it. And when you do, you will capitalize, all while wondering what took you so long. Don’t be romantic about your audience. Serve the people who can pay you what you’re worth. And remember that picking a market, like anything, is always our choice, so choose wisely. ([View Highlight](https://read.readwise.io/read/01hxmmbwz5v1htaa90svkz1xqf)) - This entire book sits atop the assumption that you have at least a “normal” market, which I define as a market that is growing at the same rate as the marketplace and that has common unmet needs that fall into one of three categories: improved health, increased wealth, or improved relationships. ([View Highlight](https://read.readwise.io/read/01hxmmdaabyy8g5rpn75zg0n0c)) - They must not want, but desperately need, what I am offering. Pain can be anything that frustrates people about their lives. Being broke is painful. A bad marriage is painful. Waiting in line at the grocery stores is painful. Back pain . . . ugly smile pain . . . overweight pain . . . Humans suffer a lot. So for us entrepreneurs, endless opportunity abounds. ([View Highlight](https://read.readwise.io/read/01hxmmftz9e30z667kcywv49j5)) - The degree of the pain will be proportional to the price you will be able to charge ([View Highlight](https://read.readwise.io/read/01hxmmga87teb7c9nsbf4e2xm3)) -  ([View Highlight](https://read.readwise.io/read/01hxmmgm0pvy03gq0kg298n2hn)) - Purchasing Power A friend of mine had a very good system for helping people improve their resumes to get more job interviews. He was great at it. But try as he did, he just could not get people to pay for his services. Why? Because they were all unemployed! This, again, may seem obvious. But he thought, “These people are easy to target. They’re in massive pain. There are plenty of them, and it's constantly adding new people. This is a great market!” He just forgot a crucial point: your audience needs to be able to afford the service you’re charging them for. Make sure your targets have the money, or access to the amount of money, needed to buy your services at the prices you require to make it worth your time. ([View Highlight](https://read.readwise.io/read/01hxmmjtz9kjrman7ycwz9fd6c)) - Easy to Target Let’s say you have a perfect market, but no way of finding the people who comprise it. Well, making a Grand Slam Offer will be difficult. I make my life easier by looking for easy-to-target markets. Examples of this are avatars that have associations they belong to, mailing lists, social media groups, channels they all watch, etc. If our potential customers are all gathered together somewhere, then we can market to them. If searching them out, however, is like finding needles in a haystack, then it can be very difficult to get your offer in front of any potentially interested eyes. ([View Highlight](https://read.readwise.io/read/01hxmmmfkbymjx6h1r65znk1y1)) - Growing Growing markets are like a tailwind. They make everything move forward faster. Declining markers are like headwinds. They make all efforts harder. ([View Highlight](https://read.readwise.io/read/01hxmmnb7bf2red67ysadrq8vm)) - There are three main markets that will always exist: Health, Wealth, and Relationships. The reason that those will always exist is that there is always tremendous pain when you lack them. There is always demand for solutions to these core human pains. The goal is to find a smaller subgroup within one of those larger buckets that is growing, has the buying power, and is easy to target (the other three variables). ([View Highlight](https://read.readwise.io/read/01hxmmp6j1empy0rj0nq6jx2mv)) - I have coined the term “niche slap” to remind entrepreneurs in my communities to commit once they pick. All businesses and, all markets, have unpleasant characteristics. The grass is never greener once you get to the other side. If you keep hopping from niche to niche, hoping that the market will solve your problems, you deserve to be niche slapped. ([View Highlight](https://read.readwise.io/read/01hxmnxjvbzrxhcvwhezhz5kyn)) - You must stick with whatever you pick long enough to have trial and error. You will fail. In fact, you will fail until you succeed. But you will fail far longer if you keep changing who you market to, because you must start over from the beginning each time. So, pick then commit. ([View Highlight](https://read.readwise.io/read/01hxmnyd883ayh78qgq3qdzz54)) - But simplicity and ease may not be enough to sway you, so let me illustrate why honing in on one niche will make you more money. Reason: you can literally charge 100x more for the exact same product. ([View Highlight](https://read.readwise.io/read/01hxmp7ah5xfb66p1f8ddxamtt)) - The purpose of this chapter is to reinforce two things. First, don't pick a bad market. Normal markets are fine. Great markets are great. Second, once you pick, commit to it until you figure it out. ([View Highlight](https://read.readwise.io/read/01hxnpkktappqz401xrrs176qa)) - If you try one hundred offers, I promise you will succeed. Most people never try anything. Others fail once, then give up. It takes resilience to succeed. Stop personalizing! It’s not about you! If your offer doesn’t work, it doesn’t mean you suck. It means your offer sucks. Big difference. You only suck if you stop trying. So, try again. You’ll never become world class if you stop after a failed attempt. ([View Highlight](https://read.readwise.io/read/01hxnpmp1fe0zbsbmgwwqge01z)) - In order to understand how to make a compelling offer, you must understand value. The reason people buy anything is to get a deal. They believe what they are getting (VALUE) is worth more than what they are giving in exchange for it (PRICE). The moment the value they receive dips below what they are paying, they stop buying from you. This price to value discrepancy is what you need to avoid at all costs. ([View Highlight](https://read.readwise.io/read/01hxw96eqtbbwa5vhbne8rq11e)) - “Price is what you pay. Value is what you get.” ([View Highlight](https://read.readwise.io/read/01hxw96s63g13kksxqvt9sxq7c)) - Getting people to buy is NOT the objective of a business. Making money is. And lowering price is a one-way road to destruction for most — you can only go down to $0, but you can go infinitely high in the other direction. So, unless you have a revolutionary way of decreasing your costs to 1/10th compared to your competition, don't compete on price. ([View Highlight](https://read.readwise.io/read/01hxw9ar0r13phxs85fr9tdnpr)) - When you decrease your price, you . . . . . . Decrease your clients’ emotional investment since it didn’t cost them much . . . Decrease your clients’ perceived value of your service since it can’t be that good if it’s so cheap, or priced the same as everyone else . . . Decrease your clients results because they do not value your service and are not invested . . . Attract the worst clients who are never satisfied until your service is free . . . Destroy any margin you have left to be able to actually provide an exceptional experience, hire the best people, invest in your people, pamper your clients, invest in growth, invest in more locations or more scale, and everything else that you had hoped in the goal of helping more people solve whatever problem it is that you solve. ([View Highlight](https://read.readwise.io/read/01hxy1e6y3v1rhfq32x15gaxdy)) - When you raise your prices, you . . . . . . Increase your clients’ emotional investment . . . Increase your clients’ perceived value of your service . . . Increase your clients’ results because they value your service and are invested . . . Attract the best clients who are the easiest to satisfy and actually cost less to fulfill, and who are the most likely to actually receive and perceive the most relative value . . . Multiply your margin because you have money to invest in systems to create efficiency; smart people; improved customer experience; scale your business; and, most importantly of all, to keep watching the number in your personal bank account go up, month after month, even with reinvesting in your business. This allows you to ultimately enjoy the process for the long haul and help more people as you grow, rather than burning out and shriveling into obscurity. ([View Highlight](https://read.readwise.io/read/01hxysb7g3xb6r0tnazn92wn21)) - Tags: #wealth - In essence, raising your prices can directly enhance the value you provide. What’s more, the higher the price, the more allure your product or service has. People want to buy expensive things. They just need a reason. And the goal isn’t just to be slightly above the market price — the goal is to be so much higher that a consumer thinks to themselves, “This is so much more expensive, there must be something entirely different going on here.” ([View Highlight](https://read.readwise.io/read/01hxysg3630hzpv2pkzq85efja)) - “We question all of our beliefs, except for the ones we really believe in, and those we never think to question.” ([View Highlight](https://read.readwise.io/read/01hxytcm9q66ar61k9zrx7edtq)) -  ([View Highlight](https://read.readwise.io/read/01hxytwvt1dw53ynnx8ftjdsb6)) - What will I make? (Dream Outcome) How will I know it's going to happen? (Perceived Likelihood of Achievement) How long will it take? (Time Delay) What is expected of me? (Effort & Sacrifice) ([View Highlight](https://read.readwise.io/read/01hxyttps83b2eg22qr44n1jx9)) - In other words, if you can reduce your prospects' true time delay to receiving value to zero (aka you realize your immediate dream outcome), and your effort and sacrifice is zero, you have an infinitely valuable product. If you accomplish this, you win the game. ([View Highlight](https://read.readwise.io/read/01hxzvbm8dm655jcaw3kkxv5qd)) - Perception is reality. It’s not about how much you increase your prospect’s likelihood of success, or decrease the time delay to achievement, or decrease their effort and sacrifice. That in itself is not valuable. Many times, they will have no idea. The Grand Slam Offer only becomes valuable once the prospect perceives the increase in likelihood of achievement, perceives the decrease in time delay, and perceives the decrease in effort and sacrifice. ([View Highlight](https://read.readwise.io/read/01hxzvemt49wwg8pav5gd3jwn0)) - Tags: #wealth - The biggest increase in rider satisfaction (aka value) was never from faster trains to decrease wait times. Instead, it was from a simple dotted map that showed them when the next train was coming and how long they had to wait. The dotted map, which only cost a few million dollars, decreased the riders’ perception of time delay and sacrifice (being bored waiting) more than actually making the trains faster (which costs billions of dollars to do). Isn’t that cool? This is how we need to think about our products. ([View Highlight](https://read.readwise.io/read/01hy0fjbp6hzs052dvfgbzag8k)) -  ([View Highlight](https://read.readwise.io/read/01hy0fn39248x10q3kddxfczyt)) - As such, as business owners, it is up to us to communicate these value drivers with clarity to increase the prospect’s perception of these realities. The extent to which you answer these questions in the mind of your prospect will determine the value you are creating. Only then, will we truly be able to realize the actual value of our product to the marketplace, and by extension, the egregious prices we want to charge. ([View Highlight](https://read.readwise.io/read/01hy0fv6gj8484xs7gxmt15tcj)) - below. #1 Dream Outcome (Goal = Increase) People have deep, unchanging desires. This is what marriages are lost over, wars are fought over, and people will willingly die for. Our goal is not to create desire. It’s simply to channel that desire through our offer and monetization vehicle. ([View Highlight](https://read.readwise.io/read/01hy0g12seshcqwrvn22y5expn)) - People generally, and our clients specifically, want: . . . To be perceived as beautiful . . . To be respected . . . To be perceived as powerful . . . To be loved . . . To increase their status These are all powerful drivers. ([View Highlight](https://read.readwise.io/read/01hy0g73z5a3rk3519bnbv85c7)) - Talk in terms of things your prospect believes will increase their status, and you will have your prospects drooling. ([View Highlight](https://read.readwise.io/read/01hy0gts7eb814t25kw7ezy72r)) -  ([View Highlight](https://read.readwise.io/read/01hy0gv3qbn2d69sce1405j3b4)) - #2 Perceived Likelihood of Achievement (Goal = Increase) ([View Highlight](https://read.readwise.io/read/01hy0j7tb55c0ekhw4k9ajd1dh)) - Then I realized people pay for certainty. They value certainty. I call this “the perceived likelihood of achievement.” In other words, “How likely do I believe it is that I will achieve the result I am looking for if I make this purchase?” ([View Highlight](https://read.readwise.io/read/01hy0hz1ksavpge16bztrz02yp)) - Tags: #wealth #business #customer - People value this perceived likelihood of achievement. Increasing a prospect’s conviction that your offer will “actually” work for them, will make your offer that much more valuable even though the work remains the same on your end. So to increase value with all offers, we must communicate perceived likelihood of achievement through our messaging, proof, what we choose to include or exclude in our offer, and our guarantees (more on these later). ([View Highlight](https://read.readwise.io/read/01hy0j4433vkk4nbdz24nnz916)) - #3 Time Delay (Goal = Decrease) Time delay is the time between a client buying and receiving the promised benefit. The shorter the distance between when they purchase and they receive value/the outcome, the more valuable your services or product is. ([View Highlight](https://read.readwise.io/read/01hy0j7e63hvskxp89fd5xntze)) -  ([View Highlight](https://read.readwise.io/read/01hy0jmw4919gfpmy8vqqksvpc)) -  ([View Highlight](https://read.readwise.io/read/01hy0jqx5tad2ydm4rnn28feyp)) - #4 Effort & Sacrifice (Goal = Decrease) This is what it “costs” people in ancillary costs, aka “other costs accrued along the way.” These can be both tangible and intangible. ([View Highlight](https://read.readwise.io/read/01hy0jse5bx9tc4gy37fvrf3mv)) - “He who said money can’t buy happiness, hasn’t given enough away.” ([View Highlight](https://read.readwise.io/read/01hy1fsdykwzqmtana3bptxyfw)) - You can make your dent in the universe while making a profit. ([View Highlight](https://read.readwise.io/read/01hy0k255b9rt46ycg9gbfaw72)) -  ([View Highlight](https://read.readwise.io/read/01hy1gv1r5n984zqq410zmjeks)) - Step #1: Identify Dream Outcome I had heard of weight loss challenges, so I started there. Lose 20lbs in 6 weeks. Big dream outcome - lose 20lbs. With a decreased time delay - 6 weeks. Note: I wasn't selling my membership anymore. I wasn’t selling the plane flight. I was selling the vacation. When you are thinking about your dream outcome, it has to be them arriving at their destination and what they would like to experience. ([View Highlight](https://read.readwise.io/read/01hy1h71nht83pyah85vx91xzf)) - Step #2: List Problems Next, I wrote down all the things people struggled with and their limiting thoughts around them. When listing out problems, think about what happens immediately before and immediately after someone uses your product/service. What's the “next” thing they need help with? These are all the problems. Think about it in insane detail. If you do, you will create a more valuable and compelling offer as you’ll continually be answering people’s next problem as it manifests.. ([View Highlight](https://read.readwise.io/read/01hy1h8f1hd8qvt5res37m4h2x)) - So, to recap, just list out each core thing that someone has to do. Then think of all the reasons they wouldn't be able to do it or keep doing it (using the four value drivers as a guide). ([View Highlight](https://read.readwise.io/read/01hy2en2g3fcx9mdzjatxs328f)) - Step #3: Solutions List ([View Highlight](https://read.readwise.io/read/01hy2eq80ys9pj4te2ye07x9jv)) -  ([View Highlight](https://read.readwise.io/read/01hy2f3ab4ay3dwbz8sdbaj92g)) - I have always lived by the mantra, “Create flow. Monetize flow. Then add friction.” This means I generate demand first. Then, with my offer, I get them to say yes. Once I have people saying yes, then, and only then, will I add friction in my marketing, or decide to offer less for the same price. ([View Highlight](https://read.readwise.io/read/01hy2f5qj5c4shp0a0g6w7cntj)) - Here’s a perfect example to drive this home. When I started Gym Launch, gym owners reached out asking me to help. They needed so much help, I didn’t know where to start. But I wanted to make sure they got way more than they paid me. So here’s what I ended up doing to fill their gyms: I would fly out to their gym for 21 days, spend my own money on hotels, car rentals, eating out, advertising, generate the leads, work the leads, then sell for them. I would even do the first onboarding meeting with clients to get them started. In short, I did everything. I took on all the risk. ([View Highlight](https://read.readwise.io/read/01hy2f8m21xceb7tbad3fx3kxp)) - They only had to put down $500 to “reserve” their date, which I made refundable at the end of their launch. So they had 0 financial risk, 0 time risk, 0 effort, and the deal was, I got to keep all the up front cash collected from selling their services, and they got clients for free. You can imagine how this was a pretty compelling offer. ([View Highlight](https://read.readwise.io/read/01hy2fhtfhdm6s2jyawdtqq56j)) - When talking to business owners about their model, I tell them to create cash flow by over-delivering like crazy at first. Then use the cash flow to fix your operations and make your business more efficient. ([View Highlight](https://read.readwise.io/read/01hy2fgjtxg782e7gmsnqbqzwf)) -  ([View Highlight](https://read.readwise.io/read/01hy320qpbzkz6tgedsjbhp697)) - a) What level of personal attention do I want to provide? one-on-one, small group, one to many b) What level of effort is expected from them? Do it themselves (DIY) - figure out how to do it on their own; do it with them (DWY) - you teach them how to do it; done for them (DFY) - you do it for them c) If doing something live, what environment or medium do I want to deliver it in? In-person, phone support, email support, text support, Zoom support, chat support d) If doing a recording, how do I want them to consume it? Audio, video, or written. e) How quickly do we want to reply? On what days? During what hours? 24/7. 9-5, within 5 minutes, within an hour, within 24 hrs.? f) 10x to 1/10 th test. If my customers paid me 10x my price (or $100,000) what would I provide? If they paid me 1/10 th the price and I had to make my product more valuable than it already is, how would I do that? How could I still make them successful for 1/10 th price? Stretch your mind in either direction and you’ll come up with widely different solutions. In other words, how could I actually deliver on these solutions I am claiming I will provide. Do this for each problem because solutions from one problem will give you ideas for others you wouldn’t normally have considered. Remember, it’s important that you solve every problem. I can’t tell you the amount of times one single item becomes the reason someone doesn't buy. ([View Highlight](https://read.readwise.io/read/01hy322xcyk30arh3ax10wgg6d)) - Step #5: Trim & Stack Now that we have enumerated our potential solutions, we will have a gigantic list. Next, I look at the cost of providing these solutions to me (the business). I remove the ones that are high cost and low value first. Then I remove low cost, low value items. ([View Highlight](https://read.readwise.io/read/01hy3323xf69mekn49d0ag5ga7)) -  ([View Highlight](https://read.readwise.io/read/01hy361jspbes5a5zd160gnxd4)) - You just want to make sure you save those high cost items for big value adds only. If you think you can accomplish the same value with a lower cost alternative, then do that instead. ([View Highlight](https://read.readwise.io/read/01hy33d23qgcw2kbxb9dv28q99)) - Many of the “one to many” solutions require more up front work. Once created, however, they become valuable assets that create value in perpetuity. It’s worth putting in the time to create these because they will create high margin profit for years to come. ([View Highlight](https://read.readwise.io/read/01hy35bxxeykgsn22w3dz0ddcx)) - Step #1: We figured out our prospective client's dream outcome. Step #2: We listed out all the obstacles they’re likely to encounter on their way (our opportunities for value). Step #3: We listed all those obstacles as solutions. Step #4: We figured out all the different ways we could deliver those solutions. Step #5a: We trimmed those ways down to only the things that were the highest value and lowest cost to us. All we have to do now is… Step #5b: Put all the bundles together into the ultimate high value deliverable. So let’s go back to the example. We see our prospects struggled with the following: ([View Highlight](https://read.readwise.io/read/01hy35fjq7h77aw83yda4dz9cp)) - Can you see how much more valuable this is than a gym membership? The bundle does three core things: 1) Solves all the perceived problems (not just some) 2) Gives you the conviction that what you’re selling is one of a kind (very important) 3) Makes it impossible to compare or confuse your business or offering with the one down the street ([View Highlight](https://read.readwise.io/read/01hy3jvvx8s0bx2dr79dynyyb5)) - “When demand increases, cut supply.” ([View Highlight](https://read.readwise.io/read/01hy40r7wn3m3x5e9et56z7tvd)) - We went through this entire process to accomplish one objective: to create a valuable offer that is differentiated and unable to be compared to anything else in the marketplace. We are selling something unique. As such, we are no longer bound by the normal pricing forces of commoditization. Prospects will now only make a value-based rather than a price-based decision on whether they should buy from us. Hoorah! ([View Highlight](https://read.readwise.io/read/01hy3jy8zx1w0y9jgvtjdqmwn0)) -  ([View Highlight](https://read.readwise.io/read/01hy40wjcpm7ph509412za1mq4)) -  ([View Highlight](https://read.readwise.io/read/01hy40x9g5fvvh759ssfajqa90)) -  ([View Highlight](https://read.readwise.io/read/01hy41006hpbj4vtnbj7nav272)) - Naval Ravikant: “Desire is a contract you make with yourself to be unhappy until you get what you want.” ([View Highlight](https://read.readwise.io/read/01hy54xgdq8ac7phsj3nsn1xg5)) - In my experience, demand for services is non-linear. Instead, I’ve found demand to be fractal (80/20). In other words, one fifth of the prospects are willing to pay five times the price (or more). ([View Highlight](https://read.readwise.io/read/01hy553r9m6z5z9ja718mw7vtf)) - Hormozi Law: The longer you delay the ask, the bigger the ask you can make. “The longer the runway, the bigger the plane that can take off.” ([View Highlight](https://read.readwise.io/read/01hy55aqwwen346sxn8x2dbbsf)) - The reason I titled this sub-section “Delicate Dance of Desire” is that supply and demand are inversely correlated (in theory). If you satisfy zero desire (provide zero supply), you will not make money, and eventually leave people feeling rejected (Note: it takes much longer than you think). Conversely, if you satisfy all the demand, you will kill your golden goose, and not know where your next meal will come from. Mastering supply and demand comes from the elegant dance between the two. If you sleep with your significant other everyday they have less desire than if you haven’t slept with them for a week. We want the ravenous prospect, not merely the aroused. ([View Highlight](https://read.readwise.io/read/01hy55dn0htebqxpgv1jyemr21)) - 1) Use scarcity to decrease supply to raise prices (and indirectly increase demand through perceived exclusiveness) 2) Use urgency to increase demand by decreasing the action threshold of a prospect. 3) Use bonuses to increase demand (and increase perceived exclusivity). 4) Use guarantees to increase demand by reversing risk. 5) Use names to re-stimulate demand and expand awareness of my offer to my target audience. ([View Highlight](https://read.readwise.io/read/01hy5cp914x9t7y5cvqv1ezq7y))