This is Leila Hormozi’s story on building Gym Launch, Prestige Labs, ALAN &

In today’s episode we’re learning from Leila Hormozi. Her businesses have collectively done 100M in revenue all before turning 28.

Her businesses have collectively done 100M in revenue all before turning 28. we’re talking about her story to this point, the magic to scaling these businesses and some really key tactical advice.

Leila is an American entrepreneur, investor, speaker, and consultant. She is the Co-CEO of Gym Launch, Prestige Labs, ALAN, and Leila met her now husband Alex in 2016 when both were head down working to build their own businesses.

They quickly realized they were not just great partners in their personal lives, but also in business. Leila has become known for her skills in leadership and management, and is frequently called upon by other business owners for her wisdom.

Please note, this transcript has been copy pasted without the lovely touch of a human editor. Please expect some typos!


I'm excited to have you here. I'm excited to be on. I'm looking forward to it. I felt really honored when your PR team dropped into my inbox saying that they had this brilliant female founder nine figure business owner ready to speak on the show. There's only a few women who have spoken on the show in that ballpark, so I'm excited to learn from you. Well, I hope I live up to the standards or the expectation fresh is on it. No, I'm just kidding. We're gonna have so much fun. I always love to start by getting the elevator pitch and I know that you have a couple of businesses.

00:04:49 You have a couple of businesses that are nine figures. Is that nine figures a year by the way, or nine figures. Like how does that break down? Yeah. Right now, all of our businesses together do about 85 a year. And so the 100 million came when we crossed it and then people kind of like extrapolate because we won the award for it. I think a lot of people don't know is you win those awards for lifetime, right? And then, but now we do do almost 100 million, so about 85, hopefully next year 100. So I can just be like, there's no discrepancy. Holy shit, that's like a lot of money in a year. You look really successful. That's cool. It's been crazy honestly. And this all happened before 28, right? For you. Yeah, Holy, holy mind is blown. Can you give us the, like the elevator pitch on what these businesses are and who you are, You know, it's funny, it's like, I'm like, I'm a 28 year old girl from portage Michigan and I just have been most of my life just obsessed with wanting to, I think, you know, a lot of people like talk about the purpose of life, I think it's like to realize your potential.

00:05:56 Um and so I think that business is a great way to express that. And so for me, it's like how my, my expression of myself and a fast way to facilitate my own personal growth is always through business and through a lot of other things too. I think relationships are obviously huge one, but in business is primarily relationships, I think it's the fastest way to do. So our businesses started kicked off with jim launch jim on chose a service company that essentially was kind of like a non franchise model for jim's. So it's like you've got the fee, you've got the business models, but there's not a name associated with it. And so we're kind of behind the scenes and we happened to launch that business At a time when social media was extremely cheap and so we were able to capitalize on all of this unexplored opportunity that nobody else had captured. And so it kind of just skyrocketed, you know, we went from 0 to 28 million in just 20 months and it was absolutely insane because I've never run a business before. I never managed people before. I've never done any of it before. I don't even know how to do billing. I used to pay people I like nothing. I knew absolutely nothing, but I just knew, I didn't that this, we had to figure out how to capitalize on that opportunity.

00:07:01 Do you mean by like paid ads like facebook ads and instagram ads? Is that what you mean? When you say that it was primarily paid. Uh and that opportunity has since become much less appealing and it's switched to different platforms in different ways of monetizing, but that was when we kind of hit the market and built our reputation, our brand off of that. Since then we started prestige labs, which was our supplement line and the reason we saw the need for that was me and my husband were the ones who actually went and launch gyms for 11 months. So we just flew across the country would go into someone's jim sell a ton of people like the most, I sold 240 people in a month into a gym and then I saw all of them supplements. The thing was selling them supplements that they could find on amazon's, they feel like they pull up amazon on the say alcohol if you like, just buy it here. And I was like so embarrassing were like we want to make sure that doesn't happen for our gym owners. So we start our own line and that birth procedures labs and then from prestige laughs because we didn't have enough complexity in our lives. We decided to start a software company called ALAN which worked the leads for all the gyms to ensure that they could get people into the facilities and so we started those three on our own and then we started essentially a holding company that we now take on.

00:08:09 We take equity positions and other businesses and kind of put them into our portfolio. So right now we have seven and those are all companies that we either own outright or own a large chunk of what kind of businesses. So we do have one currently in the fitness space, but it's kind of a complimentary business to jim launch. So it's easy to transfer our skill set in our knowledge there. We have one is a photography niche and then we have one that is in the audio book niche and then just also a general mass market business opportunity. So we typically look at education and training businesses as well as businesses that are, are going towards almost like a franchise or licensing model in brick and mortar because we both under, we understand brick and mortar extremely well. So we can help someone franchise or expand their licensing business in person, which that's kind of geared towards the entrepreneur who wants more of an exit and they want enterprise value versus there's also the education and training, we help a lot of those people learn how to take their education training business and turn it into an enterprise. What it actually does have value. Someone would want to buy it because that is what's becoming more popular nowadays.

00:09:12 So there are a lot of firms who want to buy those kinds of businesses and there's also just, you know, we take the stake in the company's, but some of them don't want to sell, they just want to learn how to have financial freedom for themselves and that's something that we've been able to do for ourselves. And so now it's like we wanna be able to help other people do it. It's pretty cool. Yeah, you've got like the ultimate blueprint that you can essentially transfer across to different industries. What's interesting to you when business comes knocking on your door for your help, Like what are you looking for when it comes to the founder or the team or the size of the business or the revenue or the profit or you know, all those things, what are you looking at? You know, we've taken on different sizes, so the smallest that will take on is eight million a year and the largest that we have right now is doing almost 50. And the revenue is important to have over a baseline because let me put it to you like this, like I can come in and I can help someone build out all their initial systems, but I'm not, I don't desire to do that. Um it's almost like creating something out of nothing takes a lot more time and energy rather than fixing the broken things that already exist.

00:10:15Edit So a lot of times what I like to do is to come into a business, especially if it's, I like around 10 million because I see all the things that are broken that are the reason they can't get to 30 or 50 million. And so that's where I feel like I get the most that they get the most outsized returns from the relationship and then in terms of a niche, we're typically looking at an unexplored opportunity, we know how to help someone, we see people who are, it's all day, right? There's people have these unexplored opportunities that nobody else is capitalizing on that are we just know we're like, it's the makings of what we had, Our three companies, which is just like it's going to boom and explode. And the thing is that most of times that they don't have someone helping them say like, here's how you catch all that attention. Then they can't capitalize on it. It's the difference between why somebody, you know, has a couple million dollars for your business and then a 50 is just knowing how to capitalize on the opportunity that that hand and also understanding, is that truly a unique opportunity? Or is it an improvement opportunity? Right. And so I think it's kind of a traditional red Ocean, blue Ocean type deal. And when you're saying that, is there like a clear example, you can give us of like someone who was doing a few million and how they captured this opportunity that you speak of to get to say, the you know the 10 or the 50 or The 20 or whatever.

00:11:27 I don't want to expose our companies that we have taken back and tell you mike well nigh own outright, which is jim locked, right? When we came into that opportunity. You know, we were like nobody is teaching Jim's how to run their own ads and capitalize on this. They're not teaching them how you can put a dollar in and get $10 out right now and instead what they were trying to do is keep all their secrets to themselves. They were trying to do it for them. They were trying to teach them ways around it, but we all knew that were in the inside circle what was really making the most money. And so we said, well what if we empowered everybody and taught everybody ourselves, there's nobody doing that right now? And so it's we we saw the opportunity, we said we're gonna go take it. And then the big piece though is that you can go fast enough to take it and not let everyone catch up with you. And I think that that's what a lot of people mistake is that they go and they take the opportunity. They don't move fast, they don't build the team, they don't build the infrastructure or they don't have the emotional capacity to deal with all the crap that comes along with it, that they can't grow so big so fast. There's a reason why most companies want conservative growth because it's much more sustainable and in order to capitalize on an opportunity like the ones we're seeing now that the internet is a thing and businesses go up and down much faster.

00:12:33 You have to be a different, like the structure has to be different. The infrastructure has to be different, how you do things is completely different than the traditional business and I think a lot of people take traditional business infrastructure ideas and how they run things and how they do things from like what was taught say 5, 10, 15 years ago and try to apply them to the age we have now but it doesn't make any sense. We have the internet, it's completely different and so you know, I think a lot of those businesses that dr are the ones who kind of break the rules of norm that makes something Yeah totally. And I'm trying to understand like for jim launch specifically like when the facebook ads and you know this kind of thing, it stopped being like the main thing to grow your business. How did you then grow? Was it like affiliates or was it just like word of mouth like what was that next growth phase for you? It's turning it into a completely different business honestly is what we did. Um it was probably a process of like two years to turn it into a very different business which was one that is built on less fast easy money because that was what it was that the industry has changed right? The industry was very appealing.

00:13:35 It was like you could make fast cash, you could get really rich off having a gym now you can still, but it requires much more work and effort on the owner's part. It doesn't mean you put a dollar and you get 10 out means you put a dollar and you might get $2 out, right? And then you have to know how to run your team efficiently, how to understand operations, how to understand financials. And so because the opportunity that requires the knowledge of all of those different realms we have to then accommodate by teaching them all those different realms and making sure they're well rounded business owners because it used to be that somebody just understood marketing could capitalize on these opportunities. They didn't even have to be that good at retention and they could make a ton of money. And now we have to say we have to train them to be true business owners because this industry is not, it's being disrupted, right? And it's not as appealing as it was years ago. That was ones that speak. Mhm totally. I've got it. And when you say like, you know, you wanted to grow really fast and businesses need to grow really fast to kind of capitalize on this kind of thing. You guys didn't take on investment right. You bootstrapped the business. How did you or what kind of investment did you need to put it in the beginning?

00:14:39 And how were you financing as you were growing when it came to jim launch? Yeah. We've always run all of our businesses off of client finance acquisition meaning. And this is my true belief. There's different ways physician businesses, some people at the low end of the market there. The Mcdonald's at the cheap ones, right? And there's people to high end of the market, right, Which is like a, you know, steak house or something like that I prefer. And the strategy we typically prefers to be the steakhouse because what it means that if I can charge you a lot more money for the experience, the knowledge, the atmosphere, you know, a lot more than just the product of getting the experience around the product. Then I have all that extra money to put into building my team, to put into better customer service, to put into going above and beyond for the customer. And so I don't, we don't work with many businesses that are on the low end of the market because it's just really hard to boot strap that it's much easier in my opinion to build. I mean, it's probably more stress for people if they don't have a high stress tolerance but to build something that costs more money, but then you have more money to put into innovation and R and D.

00:15:44 And all those things, you can make a better product. So it's worth more money. Mhm. Yeah, absolutely. And so what year are we talking about when you started prestige labs and can we switch kind of trains of thought here and go into prestige labs and talk about how you grew that in the beginning and what the kind of strategies were to get that off the ground and what made it work and what picked up the momentum. Yeah. So I'll tell you what worked to start it and versus sustain it right to start it. We took our base of gyms and we made it perfectly catered to them. And that was our launch strategies and we have all these clients who trust us and want more from us. And so we're going to launch it to them then to continue growing it, we have to launch it to people that aren't our audience, right? And so we have to find franchises and licensing companies and other gyms, pools of buckets of gyms and personal trainers that want to sell those products. And so our strategy from there to grow. It was to find partners that we could partner with and they could send traffic our way. And then the third piece to that is that if you really want to take a commerce brand even bigger, there's you could go into stores into physical locations or you could take it online and sell direct consumer, but you have to be very careful to make sure that you don't, you know, screw your affiliates.

00:16:57 And so we actually then start taking it direct to consumer because we didn't want to do the in store route. I personally just here nightmares all day of it. So I just didn't wanna try it. I know more about direct to consumer online anyways. And so that's the route that we took. So it's, it's a phase, right? First phase launched existing audience. Second phase duplicate that by finding other people's audiences launching to them. Then third phase creating another level of customer, right? Which is instead of going through affiliates, we just go direct to consumer. Those things though have been spaced out over 3.5 years and it takes Different kinds of teammates to run each one. Right? So it's like the team has to expand to also accommodate, right? You make it sound really easy, but I'm sure it's not what most things are actually pretty simple. It's just that we overcomplicate them in our minds because they seem all scary for that because you know, I know that in the beginning you said with jim launch, it was like facebook ads and that kind of thing in the very beginning, before you moved into the next phase. Is was it the same story with prestige labs, like outside of the community that you'd already built and you already launched?

00:18:00 Two, Was it an ads play or was there something else kind of strategy wise? No, it's not needed to play. You know, I would say that the unique thing about our company is that We use, I don't even know how many people say this, most of them. It's just Bs we truly have the best products in the world. We have our friend who is a biochemist who graduated when he was 20, he put together these products he had brought to more scientists in from other countries. They put them together. And then because of that, we charge a lot of money because they are not cheap to manufacture at all. Okay. But then because we charge a lot of money because they're expensive manufacturer because their quality products, we can pay large commission on those. And so we've actually paid out more in commission to our affiliates and we probably have taken out ourselves as profit to the business. And that's because if you want an affiliate strategy, then you have to ultimately serve the affiliate first, right? Which is like, well then let's just pay them more than what everybody else pays them. Right? Let's have the best product, let's have the best margins, let's have the best payouts and four affiliates. What is a good like split? Is it like a 5050 split or is it like they actually get more on a product like that?

00:19:05 If we were to give them more than 50%, we would Being the negative. So they get about 40%. Okay. And most supplement companies do about 10-20 On a good day. They'll get 30. Um, and so we just priced it as high as we could at 40. And the thing is that we also drive traffic to them. You know, we're doing follow up email campaigns on their behalf that they get 40% of and other things like that. And so we just believe the more money we make them, the more money the company ultimately will make, the happier the customers will be. Mhm. And how many affiliates and for anyone listening, who's trying to build out an affiliate strategy, I'm just trying to understand like the blueprint, that is easy for someone, not easy, but someone else can replicate kind of thing. How many affiliates you should, should you be aiming for to bring on to the program? Or is it just like unlimited? If you look at like the average stats from an MLM, it's about one in 20 people that you bring on become a high producer or a consistent producer. And so that's the stats that we've gone off of and we have found to be true, which is just there, you're going to have outsized returns from a very small amount of people. So the top 20% produce 80% of your revenue.

00:20:10 It just is, and so you have to be able to funnel 20 people in knowing that one is going to come out, you know, a really top seller, um, and then catering to that top seller is how we structure a lot of our programs. Now, we obviously always try to make everyone successful, make sure we're onboarding and training and all that, But the stats say about the same, and that's the numbers that a lot of the really large commerce brands understand when they're pushing affiliates, is that it's just gonna be one in 20. So I would say do the math based on, you know, what is reasonable based on your price point. You know, if you have An audience of 500 people, then it's reasonable to say that 50 could become top producers. What is a top producer for the you know, and for us, we know, okay, if a gym drives in 100 clients, they're going on average, sell 70 of those clients supplements if they're high performing jim. So then if we have 50 of them, you just do the math. Mm And do you have affiliates outside of the gym owners that you go out and seek and I have no idea what they could be, but like say like Youtubers for example, who are your affiliate partners who are pushing the product and that kind of thing or is it strictly the gym owners?

00:21:18 We've done gym owners and personal trainers and then we have expanded into online influencers. And so that's an interesting one because I would say again, it's like out of all the ones we pick and we try to be Tactful and who we decide on. I still think it's about one in eight become a consistent producer again, and that's because if you look at the age of influencers and influencer typically wants to just post and not do any, they don't want to build a funnel, they don't have a landing page, just want to post and have the brand out there and get a discount code. Now, if somebody were to have a funnel and build the landing page, they would have, I mean in the beginning, that's why I wanted our influencers to do and I had to talk to many agencies and many people that work with influence, they were like, listen, I don't wanna do that, they don't want to build a funnel or landing page, they just want to put the price out there, the percentage discount and do that. And I just understand like, wouldn't you want to make more money? But like they don't because it's kind of scary to have a landing page and what if it doesn't work and I put all this time and I have to learn funnels and that's very complicated seeming. And so Again, it's, you have to find a lot of people and kind of funnel them through.

00:22:20 It's almost like if you're hiring salespeople, like if you hire sales people, it's probably one in every 15-20 are gonna stick. Um, and so it's kind of the same concept, It's like you put a bunch of people in the funnel and you kind of see who comes out the bottom after the process. Two, hey, it's doing here, I'm just popping in to bring you a quick message in every episode of the fsc show, you'll hear women who were just like you trying to figure it all out and hustled to grow their business and I would know a lot of you might be sitting there asking yourself, but how do I actually scale my revenue and get to that next level from where I am now? You'll also know that so many of the entrepreneurs I speak to have mentioned facebook and instagram ads as a crucial part of their marketing mix from today onwards, I'm really excited to be able to offer our fsC small business owners and entrepreneurs and no strings attached.

00:23:24 Our long chat with leading performance marketing agency amplifier, Who you might also remember from our D. I. Y. course, full disclosure amplifier is my husband's business. And what's really important to know is that I've been able to witness first hand the transformation of so many businesses going from as low as $10,000 a month. All the way to $300,000 a month. And in some cases upwards to seven figures. So if you're listening in and you feel like you're ready to take your business to the next level, jump on a no strings attached call with amplifier where you can ask all the questions you have about performance marketing and whether it's the right time for you and your business to get started. Go to female startup club dot com forward slash ads that's female startup club dot com forward slash A. D. S. And booking a call today. And so for jim launch and prestige labs, it's kind of like if you were to just tell people, you know, what you should do is basically build out your affiliate network, like focus on that, build up your list of people and build your business that way or is there something that you would focus on first?

00:24:40 I don't have a formula for it. I know that would be ideal. But I think you have to play to your strengths like that's what it is. You know, we are good at doing that. I know lots of people who are terrible at it. Some people are much better at direct to consumer, some people are much better at affiliate strategy. So I would say like if you're looking what's the difference, right? Well, direct Consumer, it's primarily just customer support its product, having a fantastic product and customer support. Having great customer support that people don't complain about. If you look at an affiliate strategy, it's having a economical product that can pay the affiliates and be a comparable price for the end user as well as having a lot of training. You have to have multiple levels of training for affiliates. You have to be able to train and onboard affiliate. You also have to be able to support an onboard the people that they sell. It is much more complex in my opinion because I've done it in our supplement line and with our software, we went through the affiliate route. It's harder in my opinion. In terms of you have to be a really effective communicator because you have to know how to communicate to the affiliates as well as people below them and not piss off either one by the communication you give to each one versus if you just go straight to end user, it's harder because you're competing in a bigger pool typically.

00:25:56 But you don't have to have as effective of communication strategies. So it's like pros and cons seat, it's kind of like pick your problem. Do you want your problem to be communication with affiliates or do you want your problem to be that you're competing against an ocean of other companies that are marketing a similar product. Mm Yeah, that's so true. And I just wanted to ask you another question before I move on. When it comes to, we said that the split for prestige labs is probably like a 40% split when it comes to the software or Jim launch is the split higher because it's a digital product with the software. It was an affiliate model but it was also more of a resell model. Right? Which is we charge the affiliated flat rate and then that affiliate can go around and sell it for whatever they want amongst some constraints which is you cannot sell our product for lower than X. But they could sell it for as much as they want above X. And that was how we did it with the software, which is more of a reseller slash affiliate and then with jim launch, we don't do an affiliate strategy at all. It's just we, you know, have our own sales team that sells to gym owners and those gym owners decide if they want to work with us or not, if that makes sense.

00:27:02 Yeah, totally got it. When you think back in hindsight to like your life before these businesses, did you envision this is where you would build a business to like was your goal to get to this level or what was your goals as a younger woman? It wasn't as clear of like what level to get to, but like I remember from a very young age, like in high school and then in college, like you know, I went to school for exercise science and the moment that someone told me that as a physical therapist I could make $80,000 a year, I was like, oh f this God that sounds terrible. You know, they're like, yeah you only work 40 hours make 80 grand a year within like three years. And I was like, you know what? That sounds terrible, why is this something that you're celebrating? Like there's so many limitations around this. And that was when I was like, oh gosh, I'm gonna have to start my own business because I can't do that. That just sounds terrible. And as soon as I kind of I knew that I was like okay well I'm gonna make my own route, I don't know what I'm gonna do, but I moved out to California, didn't know anybody, I don't have a job, I don't have much money. And I went to like every gym I could find and try to get a job and gotten to basically selling memberships and then went from selling memberships to selling personal training and then also doing personal training.

00:28:14 And then I was like I think I need to start a gym, that's the next level and then I'll learn how to run a gym and then from there I can learn how to do a bigger company and that was how my mind worked. Um And then when I met my now husband, I got to skip a lot of those steps because we just actually ended up starting line launch. And I didn't predicted would happen as fast as it did. But I didn't have any limiting beliefs. Like I was like I think if my belief has always just been if one person in the world can achieve something that there's absolutely no reason I cannot, we are literally made of the same material. Like why wouldn't I be able to be, I think the only reason that we're not or that we would think anything else is that we put these limitations on ourselves and we almost, it's like gravity is a fact like gravity affects all of us. There's no arguing it. But a lot of us have our own forms of gravity in our minds that are limiting beliefs and we're like, I just can't because of X. And I just feel like I don't have that, I don't have much of that. And when I do find it, I can go in and rip it out because I don't want it totally. I I love that. And I think the limiting beliefs and the the negative self talk can be such a deal breaker if you're trying to go out and do big things in the world and you know achieve things that you want to achieve.

00:29:26 That's really cool. I love that for you.