The Game with Alex Hormozi The 5 Things I Look For Before Starting Any Business | Ep 967
88 snips
May 5, 2026 They break down the five structural advantages to seek before starting a business. Topics include customer retention vs one-time sales and why sticky revenue matters. High gross margins and pricing strategies are explored. They discuss choosing expanding markets, minimizing operational complexity and capital needs. Finally, they cover how uniqueness, know-how, branding and capital create durable moats.
AI Snips
Chapters
Transcript
Episode notes
Prioritize First 30 Days Then Reach Month Six
- Focus on reducing churn in month one, month three, and getting customers to month six.
- School data: month one churn >20%, month three ~10% drop, after month six churn falls to ~2%/month.
Two Company Thought Experiment Shows Compounding Value
- Two hypothetical companies show why stickiness compounds value: one loses customers annually, the other retains them.
- Company B keeps earlier cohorts and needs far fewer new acquisitions, lowering costs and increasing cash flow.
Gross Margin Determines Cash Power Not Just Revenue
- High gross margins free cash for growth, better pay, and higher EBITDA, making smaller revenue businesses potentially as valuable as huge low-margin ones.
- Example: $100M at 10% margin vs $20M at 50% margin produce similar owner earnings.