Here's Our Criteria for Investing in Companies | Ep 405

The Game with Alex Hormozi

Alex Hormozi

How To, Business, Entrepreneurship, Education

4.9 • 4.8K Ratings

🗓️ 7 July 2022

⏱️ 13 minutes

🔗️ Recording | iTunes | RSS

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Summary

They made a list, and they’re checking it THRICE! Today, Alex (@AlexHormozi) shares the 3 criteria he and his wife Leila use when they are looking into investing in companies, how these indicators greatly help their screening processes, and "what is the value of the company based on the potential opportunities?"

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:

(2:29) - 1st criteria: potential units sold, 2nd: potential profit

(4:56) - 3rd criterion: supply-demand or competitive dynamics

(7:20) - Alex's rule: 80%+ gross margin for service-based business

(9:59) - TAM not a good indicator for company size

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Transcript

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0:00.0	Hey guys, love that you're listening to the podcast.
0:02.4	If you ever want to have the video version of this,
0:05.3	which usually has more effects, more visuals, more graphs,
0:07.8	you know, drawn out stuff,
0:09.2	sometimes it can help hit the brain centers in different ways.
0:12.4	You can check out my YouTube channel.
0:13.4	It's absolutely free.
0:14.6	Go check that out if that's what you are into.
0:16.2	And if not, keep enjoying the show.
0:18.3	If you look at the biggest companies that exist out there,
0:21.5	they sell something that's very valuable
0:23.1	that costs them over to nothing.
0:25.0	Welcome to the game where we talk about how to get more customers,
0:27.3	how to make more customers,
0:28.3	and how to keep them longer.
0:29.3	And the many failures and lessons we have learned
0:31.1	along the way.
0:31.9	I hope you enjoy and subscribe.
0:33.5	My wife and I, Laila,
0:35.4	talked to 10 to 20 service information,
0:38.1	e-learning, coaching businesses per week
0:40.9	that we're looking to invest in.
	...

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