I Built 4 Businesses In A Row To Show It’s Not Luck

Building and Selling Gym Launch

• Alex built a successful licensing business for gym owners called Gym Launch.
• Gym owners would license Alex’s model to make more money.
• The business had a peak worth of about $150 million.
• Alex sold Gym Launch for $46.2 million to a private equity firm.

“I started four businesses that cracked 10 million in a row…the first big company I built was called gym launch…business at its peak was worth about 150 million dollars…”

Initial Marketing Strategy for Gym Launch

• To get the first customers for Gym Launch, Alex paid a VA in the Philippines to scrape CrossFit’s database for emails.
• He then used Facebook to market to those emails, but didn’t get any leads.
• Alex manually reached out to those emails on Facebook, messaged them, and even got some on the phone to pay him $500 for his services.

“The first 10 customers I got from gym launch…I got somebody to pay a VA in the Philippines to scrape CrossFit’s database and then send me the list of emails…started the licensing version of the model…able to sell something with virtually 100 margins.”

The Importance of Exceptional Products

• Alex emphasizes that for a business to be successful, the product or service must be exceptional.
• It took him six years to perfect and monetize the deliverable for Gym Launch, which eventually led to its success.
• The return on investment and word-of-mouth from satisfied customers is invaluable.

“Big picture is that the product has to be exceptional…took six years for me to put all those pieces together and finally be able to monetize that deliverable…little inch between good and great is yours but the return you get on it from the word of mouth that compounds is hard to fathom.”

Client Finance Acquisition

• Alex introduces the concept of client finance acquisition, which means getting customers to finance the acquisition of the next customer.
• By making more profit from the first sale than the cost of acquiring that customer, the business can eliminate capital constraints.
• This aggressive acquisition strategy was used in Gym Launch and all of Alex’s subsequent businesses.

“Client finance acquisition…get the customers to finance the acquisition of the next customer…eliminate Capital as a constraint in the business.”

Challenges Faced and Lessons Learned

• Gym Launch faced challenges such as the COVID pandemic and overhiring for customer support.
• These challenges had long-term consequences, including negative reviews on Glassdoor.
• Despite the obstacles, timing, identifying arbitrage on Facebook ads, and creating a turnkey system contributed to Gym Launch’s success.

“Many terrible things that happened during the launch…third of all of our clients went out of business…overhired for our support…became a thorn in our side for the next two, three years…timing…identified arbitrage on Facebook ads before anyone else did and created a turnkey system around how to monetize it.”

Building Prestige Labs

• Prestige Labs was Alex’s second major company, which was a sister company to Gym Launch.
• It relied on an affiliate base that Gym Launch had acquired.
• In its first month, Prestige Labs generated $1.7 million in revenue by selling supplements.

“Prestige Labs was my second big company…a sister company to Gym Launch…first month of being fully operational did 1.7 million.”

Starting Prestige Labs and Building a Selling System

• Higher pricing on the main site allowed for significant savings
• Implemented a recurring subscription system for customers
• Rolled out the product to gyms, starting with 10 locations and expanding
• Implemented gym-specific features that set Prestige Labs apart
• Initial investment into Prestige Labs was around $4 million

“We gave them a very good selling system […] I learned a lot about selling supplements.”

Challenges with Supply Chain and Legal Issues

• Supply chain difficulties, such as running out of ingredients for a product
• Potential legal issues with predatory law firms testing products
• Customer retention is a challenge in the fitness industry

“The supply chain, the hardest part of it […] We had all sorts of legal firms that would buy all your products and try to test something.”

Lessons Learned from Prestige Labs

• Reflects on starting Prestige Labs and questions if it was the right choice
• Allocating more time to improve gym launch instead of starting Prestige Labs
• Importance of having an in-house CTO for software development
• Running pricing surveys early to optimize revenue model
• Alignment of incentives with customers leads to increased profit

“The biggest lesson I have for you guys […] I probably shouldn’t have done it.”

Building Allen.com and Leveraging Data

• Recognized the potential of AI and machine learning in the future
• Developed software to aggregate data for small businesses
• Used data to optimize appointment scheduling and increase leads
• Shifted focus from small businesses to agencies for better market penetration

“I saw where AI and machine learning were going […] I’d be able to predictably show what days of the week, what times of day, what kind of follow-up sequences got the most amount of people to shop.”

Scaling Acquisition.com and Lessons Learned

• Acquisition.com generates over $200 million in annual revenue
• Importance of a personal brand and inbound marketing with content
• Need for an in-house CTO, running pricing surveys, and having aligned incentives

“Acquisition.com is the first business that was really built on a personal brand and inbound with content […] That’s been the biggest change compared to the other businesses.”

Transitioning from Transactional to Monthly Sales

• The transition from a transactional business model, where multiple sales are made daily, to a monthly sales model is a significant adjustment.
• There are numerous conversations in the monthly sales model that do not lead to a sale.
• At acquisition.com, the speaker learns more and is exposed to a wider variety of businesses, which maximizes his learning potential.

“There’s a lot of conversations that happen that don’t amount to anything…I learn more now than I ever have because I’m exposed to more businesses at a higher level.”

Co-owning Multiple Businesses for Learning Opportunities

• The speaker co-owns multiple businesses through acquisition.com to gain knowledge about various industries.
• Owning different businesses allows for cross-pollination of ideas that can be applied to other industries.
• Learning about different aspects of businesses, such as solar sales and mortgage sales, enables the speaker to gather valuable insights and potentially generate outsized returns.

“Knowing a lot about a lot of things allows you to cross-pollinate ideas that work well in one industry and then apply them to another one and then get outsized returns.”

Hiring from the Top Down for Delegating Tasks

• To accelerate growth, the speaker hired from the top down at acquisition.com.
• By hiring top-level talent, the speaker was able to delegate tasks to individuals who excelled in their respective areas.
• Hiring experts in positions such as director of sales, director of marketing, director of people, director of I.T, and director of portfolio operations contributed to the rapid growth of acquisition.com.

“The biggest part of that [acquisition.com’s growth] was because we hired from the top down…there was so much that we could automatically delegate to people who were better than us at their respective things.”

Benefits of Being Well Capitalized

• Being well capitalized allows for hiring top-level talent before the business can afford to do so with its own funds.
• Venture capitalists raise money to attract more talent early on, which helps accelerate growth.
• While every business incurs debt, being well capitalized allows the focus to remain on paying down financial debt rather than other forms of debt, such as management, cultural, or technical debt.

“You can really only [hire from the top down] if you’re well capitalized…because at the end of the day every business incurs debt, it’s just what kind of debt…for us, being the bank was willing to pay down financial debt to not have to pay any of the other debt down in the future.”

Recruiting Talent as a Core Competency

• Recruiting talent is a core competency of acquisition.com.
• The company’s private equity status, portfolio companies, and reputation provide leverage in attracting talent.
• Having a dedicated team at holdco helps train new hires on the company’s way of doing business, ensuring they understand the expectations from the start.

“We as a private equity firm have more prestige than most of the companies that are in our portfolio…we can recruit, and people respond to a private equity firm who has portfolio companies.”

Paying Down Ignorance Debt and Accelerating Growth

• One of the biggest costs in business is what you don’t know.
• Working with acquisition.com can help pay down ignorance debt by providing insights and knowledge from their experience with multiple businesses.
• The aim is to shorten the learning curve and achieve results that would typically take 10 years in just three years, ultimately driving accelerated growth for partnered businesses.

“If we can help you pay down ignorance debt and we can drag what you might already do in 10 years and three years, then for us that’s a win for everyone.”