The Game with Alex Hormozi The 5 Things I Look For Before Starting Any Business | Ep 967
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May 5, 2026 A breakdown of the five structural advantages that make businesses compound rather than stall. Short segments on customer retention versus one-time purchases and why retention drives compounding revenue. Discussion of high gross margins and industries that command them. Arguments for choosing expanding markets and keeping operations low-cost and low complexity. Ways to build defensibility through uniqueness, know-how, and capital barriers.
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Retention Is The Most Important Advantage
- Revenue retention (net revenue retention) determines whether a business compounds rather than constantly needing new sales.
- Move customers up-price tiers (e.g., $9 → $99) and focus on qualifying to drive >100% revenue retention and automatic growth.
Fix The First 30 Days Then Walk To Month Six
- Prioritize improving the first 30 days, then month three, then month six to dramatically reduce churn.
- School data: >20% churn month one, ~10% at month three, then churn falls to ~2%/month after month six.
Two Companies Illustrate Why Retention Wins
- Contrast two companies: one sells 100 new customers yearly but loses them; the other retains customers and adds 100 each year.
- Company B needs far fewer acquisitions, better cash flow, and easier scaling—so pick retention.