DeepSummary
Alex Hormozi discusses the importance of identifying the most valuable part of a business, which he refers to as the "goose" that lays the "golden eggs." He emphasizes that many entrepreneurs make the mistake of trying to sell the goose when they should be focusing on selling the eggs or the recurring revenue stream. Hormozi provides examples of businesses where the most valuable component was not what the owners initially thought, such as an event business where the real value was in the system for acquiring and managing venues.
Hormozi explains how to analyze a business to determine which part is the goose and which is the eggs, highlighting factors like recurring revenue, lack of dependence on a single person, and potential for scalability. He suggests looking for mergers and acquisitions activity in a particular industry as an indicator of what investors value. Hormozi also discusses the concept of raising money by selling a minority stake in a valuable "goose" business to fund growth and acquisitions.
Throughout the episode, Hormozi stresses the importance of collaboration and consolidation in fragmented industries, arguing that the most successful entrepreneurs find ways to work together rather than competing. He provides examples of roll-ups, where multiple small businesses in the same industry are combined into a larger, more valuable entity that can be sold at a premium.
Key Episodes Takeaways
- Identify the most valuable and sellable component of your business, referred to as the 'goose'
- Focus on selling the recurring revenue stream or 'eggs' rather than the 'goose' itself
- Analyze your industry for M&A activity to understand what investors value
- Remove key person risk from your business to increase its sellability
- Consider consolidating or partnering with competitors to increase value
- Raising capital by selling a minority stake can fund growth without exiting
- Collaboration is often more lucrative than competition in fragmented industries
- Continuously evaluate and pivot your business model to align with investor preferences
Top Episodes Quotes
- “A lot of times, the thing that I thought when I started building the business that I was going to sell wasn't actually the thing that the ultimate investor ended up valuing.“ by Alex Hormozi
- “There's something that creates value, and then there's the thing that is valuable. And so figuring out which of the things that you have in your business is the goose and which of them is the eggs is one of the highest leverage things that you can do because you can build towards the exit intelligently.“ by Alex Hormozi
- “The thing is, is that the goose often is incredibly valuable but not sellable. And that's what's, that's the difficult part about this.“ by Alex Hormozi
- “If you're bigger than the company, you will always be key man risk for the business.“ by Alex Hormozi
- “I'm telling you, all the guys that I know who make gobs and gobs and gobs of money, like, it's so rare that you're actually competing against people.“ by Alex Hormozi
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Episode Information
The Game w/ Alex Hormozi
Alex Hormozi
6/19/24
"Keep the Goose, Sell the Eggs." Today, Alex (@AlexHormozi) shares a valuable framework for understanding if your business is sellable, and if it has multiple components of it, which could be the most valuable aspects of it to sell.
Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.
Timestamps
(00:24) - Story of someone trying to sell his business
(01:16) - The Golden Goose
(03:24) - The Big Picture You Have to Understand
(06:21) - How to Verify What Your "Goose" Is
(9:56) - Mrbeast Holdco Example
(14:38) - How Rollups Work
(18:42) - Closing Remarks
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