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"I'm Broke, What Business Do I Start?" — Transcript · YTtoTranscript

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"I'm Broke, What Business Do I Start?"

Alex Hormozi · 5,478 words · 27 min read · EN

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Below is the complete, readable transcript of "I'm Broke, What Business Do I Start?" by Alex Hormozi on YouTube. Read the full text, copy any part you need, or generate a transcript for any video with our free tool.

so if you're broke or you don't know what business to start by the end of this video you will know what business to start who you're going to serve how you're going to serve them and the exact message to send to get your first five customers I'm a co-owner of school.com where we help tens of thousands of new

people every single month start their first business online and right now one out of two people who start a paid community on school make their first dollar one out of two this process I'm going to show you works so there's five parts of this Frameworks and then two bonuses one is that's a advance and one

that'll give you next steps on what to do with this so you can make your first dollar so it starts with the what which is what is your business actually going to be about and so I use something called the three PS framework all right so you can write this down the three PS

and that's because almost all businesses get born of one of these three PS the first is pain so it's something that you went through personally and had to overcome so A friend of mine has a wife well they're married and they have nine kids and so in her going through this process she was like well what would

work for me and I'm like well you have nine kids so I'll bet you that you just making lunch for nine kids every day is probably a process she's like oh yeah I have this whole thing that I do so I organizes so everybody has their own uh bags and they all know who it is and

then I can do it in a time that's cheap for me and gets them all the food that you know all the protein and all the other stuff in the Street's like I have a system around that and I was like that is the beginning of a business the second is your profession meaning what

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you do for a day job or what you've done in the past I've recently made a video about a lady who quit her job as a registered dietitian at a hospital and then started teaching other registered dietitians how to Bill insurance and the reason that she learned how to do that was at the hospital she had to work six

days a week and work 12 plus hours per day as an RD and so she only had one day a week that she could bill her personal clients on the side and so she had to figure out this really complex Billing System and how to do it really quickly and so she took something that she

learned from her profession and made a business around something really really narrow and so a lot of people think that it's got to be this big crazy thing if you solve one very specific problem for somebody that is a business and you might think oh well how am I going to get a huge following from all that this

particular individual has 5,800 people who follow on Instagram and she takes home almost a million dollars a year in income and so if you're an accountant or you do HR or you edit videos or you do whatever like every single job that exists in a business means that fundamentally people exchange money for

the skill you have and so any professional skill that you do in a business you can do as a consultant or as an independent contractor or teaching other people in that profession there's lots of tree branches that come off of that but this is the second big category that businesses are born from the third

bucket of peas is Passion these are the things that you're always interested in these are the Articles you read these are the YouTube videos you watch these are the podcasts that you listen to in your spare time it's the stuff that you're just inherently interested in that you like can't get enough of and so

for me personally I was somebody who was into fitness it was what I was reading I was reading tenation which none of you guys have even heard of but it was this blog online that had all of the lifters in there and all these trainers and coaches that were talk about stuff and

every night I would eat my meal and I would read whatever the new T Nation articles were and I did that every single night and that's what my passion was and when I went to work the guys that I worked with are like dude if you don't start a gym like I will they like

they offered to front me the money to start the gym because I was so obsessed with Fitness at the time and so if you're like okay well I overcame food allergies or I am an accountant or I'm into painting model cars got it but how am I going to turn that into a business

don't worry that's what I'm covering in step five so let me break this belief for you really quickly that you need to get the perfect pick on the first try the reason this isn't accurate is that it assumes that you with zero context having not talked to customers and gotten zero feedback or

are going to pick it right the reality of it is that picking anything is the first step because that begins the iteration process of feedback so that you can get it right so the five-step process I'm going to walk you through is going to get you to your best bad idea as fast as possible and the reason we

say best bad idea is that we want to get it out there so that we can make it less wrong over time and if you keep making a bad idea less wrong eventually it becomes a good idea and then people say how did you pick that right on the first shot and you will smile and know that

that's not actually how it worked so great if you have your first P you say I know what pain it is or what profession or what passion Now we move on to step two which is the who so who are you going to do this what for there's three categories that the who's are going to

fit into the first is people like you the second is people that you've helped before and that can be for money or not for money but I'm assuming if you're watching this video that you haven't helped them for money you just did it as a favor which I'll tell you my story about that in a second and the third is

people who you think are underserved now this is probably the more formal way that people look at markets that are growing that you think there's an emerging Trend it's people that have this huge demand and they're underserved this is probably the most formal way of doing it but most businesses that come from I would say the heart or the mind

come from one of these two things it's I went through this thing and then I took a long time to figure it out and now that I had fig F out I want to help other people who are like me figure it out Sarah Blakeley was like man none of these underwear like you know hide the

hide the bad and show the good and so then she created Spanx and then Spanx went on to sell for a billion dollars to blackon I think earlier last year and so you can absolutely build a massive business just trying to solve a very personal problem to yourself differently Zuck started in his dorm room to make

some sort of platform for horny college kids that eventually would become face Facebook or for me specifically the reason I made my first dollar the first actual dollar that I ever made was there was a lady at the gym and she said she came to me and said hey can you help me

with my food and it was just cuz I looked in shape and I was like sure and like I didn't know her super well and so we met at a pizza shop ironically and she and so she asked me to talk to her about her food and so I just asked her what she was buying for her groceries

and gave her a couple of you know recipes that I did to increase her protein intake and at the end of me sitting at that pizza parlor with her for like an hour and a half she just took out her purse and wrote on a check $100 and she handed it to me I didn't

sell her I didn't say a price she just handed me $100 for the amount of help that I'd given her and it was really weird because we walked out of the pizza parlor and then she got in her car and I like opened up the check again and I was like holy I could get paid to do

this and it was this huge moment for me and forever always grateful Sandy Smith so once you figured out whether it's someone like you someone you've helped before or an underserved Market you pick one of these three things and then you plug them into this which is a call out and so the call out describes the person

back to them this is going to be important for what we use in one of the later parts of this that's why if I had to pick one for you I would have it be this one because you already know what it's like to have the Pains of this person you're usually in the demographic

you have you're in the age group and so you probably know a lot of the aspirations and dreams that they do rather than having do the research so this is the quick and dirty way and many many many businesses are started this way and in my opinion this tends to make mercenaries this tends to make missionaries and so

what I mean by that is people who start purely based on analyzing markets and Trends and things like that they're like they're in it for the money they don't really care about the product or even the customer but if you're helping people like you overcome something that you overcame before you know their pain

and you will care that much more to deliver an exceptional product and improve their experience over time and I think this is what keeps you in it for the LA ha and when you look at some of the biggest companies out there in the world many of them started with a Founder in a garage with some problem

that they hated and then tried to fix so let me draw this on a new page to give you a really clear idea of why this next part is important if you're just like people like me that's not descriptive enough to get really clear on the Avatar and so I think about it as having five

kind of frames that I think through to narrow down my avatar I've got the age gender profession like before because if you are going to use profession then you might as well say it got their problems or their pains and then we've got their interests or passions and you'll notice these are more or less than three PS

from before okay and so what we do is you want to pick three and so let me give you an example so if I'm looking for 35-year-old men to it's not narrow enough right or if I just said 35-year old it's not narrow enough 35-year-old men who were accountants now I can get

even narrower by adding more but you have to have at least Le three you want to do three or more so 35-year-old male accountants who uh are bored at their jobs right great well that's a pretty clear Avatar if I say that and there's a room full of 35-year-old male accountants who are aboard their

jobs and that was in the other room that other room should light you up so think about it this way from a visual perspective if you could fill a room with just a certain type of person that You' get excited to go in there and help them what is that room of people look

like what are they interested in what are the problems they're suffering from what what's their job now you could do the same thing and not have the profession but I'll give you an example so if I said 35-year-old or 45-year old women who are struggling to move up in the workplace okay that's at least three get

the idea so you just want to get narrow enough that they know you're talking to them let me break a second belief for you that if you get really narrow it means you're not going to be able to make as much money because you don't have as many people to sell to the other

part of that is the more specific you get the more you can charge so let me tell you something that might blow your mind so if I sold time management as my thing that's really really broad all right that's my what okay well I might be able to charge for my time management

PDF I don't know 19 bucks okay now if I said I've got a time management product for salese then all of a sudden this is probably a $199 product if I said I have time management for outbound salespeople then that's going to be even more specific and this might be a 1999 product and if I said I have the

entire outbound time management system for garden and power tools then this could be a $10,000 thing because anybody who's this specific with their Niche knows that they're going to be able to make a couple sales with this new system and more and pay for it and so as you get more specific with your prospect you

can get more premium with your price and if you're the best at time management s for outbound sales rep that do garden and power tools how many competitors are you going against almost no one and so you're selling in a total blue ocean where it's just you with the with a life raft and all of them are in there in the

pool around you struggling and then when you have your lifecraft and you're the only boat in town they've got to pay whatever you want in order to to scoop them out of the water if you're enjoying this process I run something called the school gam you can go to school.com games you can start for free I'll help

you build your first business by taking you through Frameworks like this and many others and give you the platform to do it to make your first dollar right now more than one out of two people who start the school games with a paid Community make their first dollar online very proud of it so if you like that go

check it out you can start for free so that's step two that's the who now we go to the how and there's two parts to the how how so let's cover those now so with how part one we think about the upside this is all the good stuff that you're going to help them achieve or experience

as a result of using your thing all right so you want to think about how much easier their lives are going to be as a result of using your thing you want to think about how guaranteed the outcome is now as a result of using your thing you want to think about much

faster they're going to be able to get what they want using your thing and you want to be able describe to them how it would feel to experience their dream scenario and so if these look familiar these are the four elements of the value equation but written in the positive and so the perfect offer is something that

is incredibly easy guaranteed to happen immediate and is exactly what they want and the sub part of this is exactly the way they want to get it I'll give you a b a b example from gym launch so the average gym makes $30,000 in their first 30 days you using the gym launch system

now the average gym owner makes $36,000 a year in take-home income so if they make $36,000 a year as take-home income then we can help them get what they want easier guaranteed faster and exactly what they wanted to do which was to fill their gym up and make money whatever benefits you sell there's some good

stuff and so we want to say hey here's all this good stuff you want and here's how I make it easier faster guaranteed and this is what it looks like when it's right that's what we explain with the how part one so now that we've listed out all the good stuff let's flip over

to how part two which is going to be the bad stuff and if you think about motivating an individual in general you fundamentally only have two things that are going to increase the likelihood that they do what you want you either have to take away the bad stuff that they don't want or give them more good

stuff that they want that's it that's all you can do and so thinking about it from this framework has helped me so much in copyrighting in sales it's like you're either you're going to get this thing or you're going to avoid this thing you hate that's it and it's just how well you can describe either of

these things which makes it more and more compelling which is why picking someone like you makes it easier to describe the very intricacies of their pain so for example if I said lose weight fast that might have worked in the 1900s but people quickly learn that they can't believe things that people say and so the more specific you are

about the pain and the benefit the more likely they are to believe you if I say hey stop feeling your thighs chafing when you're out in the sun that's a very specific pain right and so someone would be like oh I I experienced that but it would pass their guard rails and their

Banner blindness around ads and copy and marketing because it's very specific to their pain you want them to be like I can't believe they know this about me because you know it about you and you just describe it back to them so now we're going to talk about the bad stuff so these are the inverse of the

things that I was mentioning earlier so instead of the guarantee we're going to talk about the risks that we're going to help them avoid instead of how fast it is we're going to talk about how slow it is for them that they're not going to have to experience that slowness instead of it being easy we're going to talk

about all the pain and sacrifice and suffering that they have to go through in order to experience the benefit so the nice thing with this one particularly because there's going to be the most meat here in terms of what you're describing because the guarantee you to say this is where you state stats

and you and you show what you've done what you plan to do the fast and easy you put a timeline around it and what they can expect versus the timeline of what's bad and with the ease there's two sides to this so one is what are all the good things they normally have to give

up that they no longer have to give up with your system and what are all the bad things that they would normally have to start doing with other products or other services to solve this problem that with your product they don't have to start doing so let me give you an example so weight loss is simple so if I

have to start working out and waking up early then that's something bad I don't want to start doing and so if you use my system you don't have to start doing this bad thing you don't want to do to get the result if I want to avoid the negative thing that you don't want to

give up which is hey you like doing taco Tuesdays and eating out with your friends normally you'd have to give that up but with my system you can keep that thing you like without sacrificing it and still get the result and so you show both of these that make it easier because what makes things hard what

makes things hard is doing things we don't like and giving up things we like and so if we have our solution that they can not have to do things they hate and keep doing things they love then they will like that better you might be thinking okay well I get the good stuff

and the bad stuff for how part one and how part two but how do I get all this stuff well first off if it's you then you know what these pains are if it's not you then you do the three-letter method you ready for it ask people who you want to sell so you get on the phone

you reach out to people and you basically do an interview now a good interview basically functions like a sales call which is like what are the problems you're struggling with right now how long have you struggled with them what makes it painful specifically can you describe what the experience is like when it's not right could you

describe your ideal experience if it were done the right way what are some of the things you have to stop doing that you like doing that you don't want to stop doing when you've done things in the past what are the things that you have to start doing that you hate doing that you've had to start doing in the

past in either of those scenarios in all of those scenarios you're learning more about the customer you're learning about their dreams and aspirations but the pains that they've experienced along the way and the culmination of all of those answers become how part one and how part two the good stuff you're going to help

them get and the bad stuff you're going to help them avoid and if you're still wondering how am I going to make money from all this stuff don't worry we're going to get there right now step five putting it all together combine so this is the Mr Miyagi moment in Karate Kid where you've been waxing on and waxing

off this entire time so you can get to the moment where you can finally get your car so we're going to do osim money Mad Lib we're going to drop everything in so I help who which we got from step two which is the combination of what the big thing's about and then narrowing it

down through step one and step two I help who 35-year-old male accountants get a new income stream whatever the whatever the good thing that they want is Right which is how part one without how part two the bad stuff through and this is going to be the bonus that I'm going to cover in a

second all right which is something called a unique mechanism all right so I'll cover that in a moment but fundamentally you could ignore this last part and this is the basic version of it and this is the more advanced one once you get some reps and the reason I'm going to explain that one in a second is

because if you haven't done it yet you don't have a unique process and so if you're just starting out this is me meeting you where you're at I help who get good stuff without bad stuff I help 45-year-old women who just had kids get into High School get back into their High School jeans without giving up time

with their family I help non-fiction business authors get on the Wall Street Journal bestseller list without looking cringe and listen it doesn't have to be like you don't have to perfectly do this every time I could just say I help young guys starting school for the first time pick their Community under 30 minutes

like it's just if you can nail them then the person's like shoot that's me right the more you add these pieces in they're like that's exactly what I'm struggling with this is exactly what I want and then the unique mechanism makes it nice and sexy so now that we hit the bonus let's go to the bonus section so the

bonus number one is going to be something called the unique mechanism all right now the reason I wanted to combine it before the unique mechanism is that if you are starting out you might not have a unique process yet all right but a unique mechanism is something that differentiates Your solution from other peoples so if

there's two people in your Market or 10 or 100 people in your Market one you could probably go narrower your Who and the problem you're trying to help them solve but let's assume that you did that and there's still 10 people that all help 35-year-old male accountants you know uh watch Friends reruns because

that's your passion without feeling the Judgment of other people because you have a cool streaming platform or you know access between all these other ones that allow them to do it for free whatever okay so let's say that that's your Niche and there's 10 other people who are serving them what you want to

have is some unique mechanism and this is not a new Marketing Concept you want to have some sexiness or some special sauce that makes the prospect think oh I'm going to push all of my hopes and dreams into this process like if I had only had this special sexy thing I was six inches away from gold and then I

just needed this thing to get me over the hump and the point is that that's what they should feel like oh if I just had had this thing all along I would have already been successful so it's like you have this secret that you can help them be successful with and the proof is in the pudding and so even if

you think about this YouTube video as a product if you wanted to the unique mechanism is the five-step process or the five-step niche narrowing the niche narrowing nunchuck right because it's a a wax it on the head so let me explain how this works is that you're going to either have a list or steps

that someone has to follow to achieve a result fundamentally that's what it is you're either going to say you have to do all these things so just think of checklist like once you have done all four of these things you'll achieve the outcome or you have to follow this in sequence you have to do one and then you

have to do two and then you have to do three and then four the difference here is that these don't have to be in order you just have to do them all here you have to do them in a specific sequence but either way you're going to have a list or a step a series of steps that

someone's going to follow and then all you do is that you wrap this whole thing and then you name it because this becomes your proprietary process and that proprietary process becomes your unique mechanism if you've heard me talk about content we have promise proof plan and so it's hey I'm going to help you

pick your Niche by the end of this video proof is that I've helped tens of thousands of people do this on school so are pretty good at it and then the plan is we're going to follow these five steps Tada and here we are and so that process we can call the mosy money Niche

method whatever so if you've heard of P90X the unique mechanism they had was muscle confusion right and obviously a zillion Fitness influencers like there's no such thing as muscle confusion and they're right but the thing is is it was unique mechanism they sold hundreds and hundreds and hundred hundreds of millions of dollars of fitness programs

using it if you look at Weight Watchers they have a point system the point system is their unique mechanism if you look at some of these other ones they have their XYZ portion control thing like they all have a unique mechanism their way of doing it think of this as the vehicle this is going to take them

from where they are to where they want to go and you're the one who's piloting this ship with them in the back seat or they're piloting it with you in the back seat with you as the guide the point is is that that becomes the special sauce and everybody should do this and that's

where you can have the naming conventions I cover naming stuff in my last chapter here on the offers book where I either like something that rhymes or I like alliteration if I can if I can do it so as promised if you're following this process then you got the what which helped you narrow down the

who you followed the steps in that to Niche down to figure out very specifically who the Avatar was Someone Like You someone you've helped before or someone who's underserved we did the good stuff we looked at the bad stuff we put it all together into one sentence so you can immediately use it if you're a

little more advanced then you figured out your unique mechanism or your system or your process or your method to put it all together so they're like wow this is exactly what I need so what's this last bonus well I said I'd help you get your first five customers so let's do that all right so I'm going to give you the

absolute simplest system for getting your first five customers using what we just had and so what you do is you will greet someone greetings hello you will mention something specific about them that's a compliment you'll insert that sentence that we just went up with came up with and then you'll ask them if they

know anybody who could benefit from that and you will do this for 4 hours per day or until you reach a 100 I don't care which you can do four hours a day or until you reach a 100 and if you do this every day and you make this process what you reach out to people you

will get five customers I outline this entire process inside of the leads book in the first chapter called warm Outreach to help you get your first five customers and if you like me to help you lead along and you want to do it via community you can go to school.com games I walk people I literally walk thousands

of people through this every single month uh so we're pretty good at it like I said more than one out of two people make their first dollar online so um check it out