https://www.youtube.com/watch?v=-Pz0NpcILOY

1 00:00:00.000 --\> 00:01:00.000 what's going on mosey nation this is
alex hormozy your host and uh most legit youtuber with the best setup in
existence including my mom's basement i'm kidding this is a 5 million
condo and i just happen to not like windows where i work that being said
the purpose of this video is to blow up some of the things that i saw
online with relation to how to make more money when it comes to getting
a raise if you are an employee number one or number two getting a raise
from your customers as a business owner because at the end of the day
all of us are still beholden to our customers that we serve and so if
you don't know who i am my name's alex from mozzie on acquisition.com
it's a portfolio of companies that's over 100 million a year and i have
nothing to sell you and i make these videos because i think it's fun so
let's rock and roll so i think the easiest way to solve this dilemma or
this problem for not getting paid enough is to understand what are the
variables that influence pay right right damn right and so i think a fun
process is to go through this and think about it using inversion
thinking all right which is

2 00:01:00.000 --\> 00:02:00.000 something that charlie munger champions
and a lot of other great thinkers and so if we wanted to and this would
be the problem that we're solving for if we wanted to make as little
money as humanly possible and we were employees and or business owners
what would we do well number one we would provide very little value all
right that'll be the first thing that we do is we'd have we'd have a
skill set that that just does not provide a significant amount of value
to a business and or to a customer all right that's first off is what we
would do the second thing that we would do is we would not ask for very
much of that of that value that we were creating so hopefully we're
creating some level of value which is why we're getting employed or
where why we're asked to solve some problem for a customer right we're
solving a problem there's a job to be done that is the value that is the
potential amount of money that we can earn the amount of that potential
money that we earn is dit is predicated based on our ability to
negotiate and so we ask for a very small amount of that money all right
so low value and then of that small number we ask even for a smaller
percentage of that number because of our ability to negotiate that would
normally be the only two

3 00:02:00.000 --\> 00:03:00.000 things that you'd think okay well this
is my potential and this is how much i ask for and so those are the only
two variables that that would create how much i'm getting paid ah but
there's a third all right and i'm going to get to the three and how you
can flip this at the end of the video all right but the third one that
we're going to look at is supply demand dynamics meaning how easily
replaceable is the value that we're providing and so in an unideal world
in bizarro land where we want to get paid as little as possible using
inversion thinking we would one have low value two ask for very little
of it and three have a line of people standing behind us the opposite of
scarcity right uh working against us we are commoditized our skill is
easily found and easily replaced by other willing people who want to do
it for less money right because they hate us they hate the economy they
hate capitalism and they hate generally moving up in life okay so if you
are an employee or you are a business owner and you are trying to get
paid more then we can invert this process and

4 00:03:00.000 --\> 00:04:00.000 think to ourselves what are the ways
that we can number one create more value which i wrote a whole book
about all right 100 offers 99 cents if you want it number two is how do
we negotiate now we have a high potential value that we are creating
right so we've now we've flipped the equation we're creating we're
creating tremendous amount of value for the person now one of the keys
in communicating value is using multiple lenses through it to see it all
right so it's not just about um and the easiest one is just the
quantitative number value in terms of how much money are we are we
creating right how much money are we helping to produce all right so
that is monetary value there are other forms of value right there's lots
of services out there that exist that especially consumer services where
there is no direct amount of value but there's indirect value so if you
help someone lose weight the amount that you can charge on that will
depend on who you serve right which would then actually get into a
fourth bucket which is picking the right customers right and i'll tell
you a quick story about this before i dive back in i think you'll

5 00:04:00.000 --\> 00:05:00.000 like the tangent so there's a boy and
he's 16 years old and he's you know looking to get his first car and his
father one day surprises him with the vehicle right so he's super
excited he sees the car but it's a little bit of a clunker it's an old
you know it's an old car right but he's fine with it and the dad says
hey if you want you can go cash this in um and then get you know and
then use the money to get something else if you want and he says okay so
he says hey why don't you just go down to the you know the the car lot
and see uh see what they'll give you for it so he goes over the car a
lot you know excited to see what they'll trade trade the car in for and
they said you know what uh we'll give you five thousand dollars for the
car and he was like okay so he goes back to his dad tells him the story
he says okay son well why don't you why don't you try the pawn shop see
what see what they'll give you for like the scrap yard so he goes over
to the pawn shop scrap yard right goes there and uh and and he asked the
same question he says you know this is the car how much can i get for it
they're like ah we'll probably give you a thousand bucks just for like
the parts in the medal and he's

6 00:05:00.000 --\> 00:06:00.000 like so he walks back defeatedly to his
dad and he's like you know it's only worth a thousand dollars to those
guys stats says hmm why don't you go down to that antique dealership see
what they say so he goes to the antique dealership shows them the car
and they say oh my god this is a historic xyz car there's only this many
of them ever made this is a 200 000 vehicle the kid blown out of his
mind runs back home he's like dad you won't believe it and the dad
smiles and he's like what it's like they say this car is unbelievably
valuable it's historic it's like one of a kind blah blah blah and so the
dad pauses and says so listen son what i want you to see from this is
that the value that someone will give you is not necessarily just a
result of the vehicle of who you are but who you are talking to and so a
hidden bonus of this video that i'm going to give you right now is that
there are three is what i said but the fourth one is who we are serving
right so the amount that you can charge if you are a business owner will
be also predicated on who you serve right if you can help a billionaire
lose weight he will probably pay you more than somebody who's on

7 00:06:00.000 --\> 00:07:00.000 who's on unemployment right just the
nature of like that problem to that person is more valuable to solve
right and that's because indirectly for them if that helps the
billionaire right get his wife which he might value more right or he
might be able to seal a deal because people respect him or whatever it
is right then there is more indirect value that you can ascribe to the
the services that are being provided okay so i said there were three but
there's actually four because i'm trying to keep you interested in the
video right keep keep going keep it keep you guessing all right but so i
said number one was value okay so values can be predicated on who we're
serving and also how much value we can provide which is going to come
into what's the dream outcome we're providing them how likely do they
think that they're going to get that with you as an employee and or as a
business they're hiring because all of us are doing jobs all of us are
employees right in one way or another how quickly we can get that done
and then how much work they have to do as a result of that which you can
translate in a couple ways if you're an employee and someone always has
to check up on you and always has to give you direct instructions that
is less valuable of employee than somebody that

8 00:07:00.000 --\> 00:08:00.000 employee who's coming with the ideas
can get things done quickly i have a large amount of confidence that
someone's going to do the job and the perceived outcome that i that i
want to create that employee can duplicate quickly awesome so that's you
can reverse the value equation that i talk about in the book whether
you're working for a customer or you're working for a boss either of
those things and i'll get to how you can make more money as an employee
in a second okay so one we're flipping the inversion to we create lots
of value number two is going to be how much we ask for all right so how
much we negotiate and so as a business we do this by setting our prices
right that is that is fundamentally the negotiation that occurs is that
we set our prices and a lot of times you'd be amazed that just asking
for more you get more right because most people sell from their own
wallet as in they think this is a lot of money and therefore they ask
for what they believe is a lot of money and here's the fundamental
fallacy with this problem what comes easy to you is typically not easy
for other people and so i'll give you a simple example personally i am
not a car guy i am not a fix-it guy i i just don't care and so if

9 00:08:00.000 --\> 00:09:00.000 i went to a mechanic shop and they said
hey we've gotta you know change your oil and actually you know do xyz in
your car it's gonna be you know 100 bucks if they say 100 bucks or 300
bucks it's it really isn't gonna i like i'm not gonna notice i'm not
gonna care but if you talk to another mechanic they're like you charge
that guy 200 to change his oil that's crazy it only takes two seconds
and all you have to do is turn the knob and the oil comes out and then
pour it back in whatever right and it's because to them to a mechanic
changing oil seems like a very easy thing to do and it probably is but
to me it's something that is going to take me time to learn that i don't
care and so what is easy to one person because you have been doing it
for so long might not necessarily be easy to other people and so your
perception of the value is actually skewed which is why you should not
be the one necessarily setting your prices you allow the market to set
the prices for your services and or the pay that you get so number one
we provide lots of value number two you negotiate or ask for a higher
amount okay and if you're an employee an easy way to do that is create
some sort of variable compensation for yourself and say hey

10 00:09:00.000 --\> 00:10:00.000 these are ways that i think i can tie
into the revenue of the business would it be fair would it be
unreasonable for me to ask for a percentage of that not for the
necessarily the whole company but at least in this way so that i can
drive towards those goals which will also make the company more money
which is exactly what we're doing as a you know when we serve uh
customers right especially if you're in b2b services you say listen i
think that this thing will yield this amount of results and i would like
a percentage of that right and it's variable compensation so the best
way and the highest people who make the most money have variable
compensation business owners have variable compensation depends on how
well your business does and how how much you serve your customers the
business itself is variable compensation right the enterprise value all
right so if you can shift your thinking around this it will pay
dividends so value negotiations go and the third one which is
competitive landscape competitive dynamics or supply demand for the job
to be done all right so think about this way if i have lots of people
who can do the job if i have somebody who comes up to me let's say
they're an employee and they say hey i'm providing lots of value and i
would like to ask for more i would not have

11 00:10:00.000 --\> 00:11:00.000 leverage on this situation if there
was 20 other people who were lined up who could do the job and were
willing to accept less which is why this applies for both labor as it
does for owning a business it's both sides right if i want to provide
xyz service and there's another guy who's willing to provide xyz service
for less and there's nothing that really differentiates us then most
consumers will just go to the one that costs less which brings up the
important lesson of how do you invert this how do we solve this problem
which is we have to be in a category of one all right and so we do this
by trying to niche down and create more specialized services because
then we decrease the pool of people that we are competing against now as
you scale up in a business i'm going to answer this as a business and
also for employees as you scale up in a business you do in general go
broader but usually you can use the experience the depth of knowledge
you have and then be able to be better at that stuff at a larger scale
and so the easiest thing to do which is why i talk about this in the
book is is is niche down at first right so that we can get really really
good at delivering one very specific high amount of value to a very
specific customer

12 00:11:00.000 --\> 00:12:00.000 right and so when we do that we
basically fall into creating lots of value we price high so we're asking
for a bigger percentage of the value that we know we're creating and
we're doing it as a category of one in that there's no other people who
can do it and so we add other features and bells and whistles and
bonuses and guarantees to create offers that are more compelling to a
customer that are one of a kind which make it more difficult for other
people to compete against us and thereby allow us to capture a larger
percentage of the value that we are creating that's the idea that's the
point now if you're an employee and you walk through this process then
the idea is how can i use my unique unique being the key skills and
experiences to make the business that i'm working for more money right
because ultimately that is i mean that's where you're getting
compensated it's a percentage of the revenue that you're responsible for
right indirectly or directly and the more directly you can be associated
with it the more you will get compensated because the more clearly you
can point to the value that you are creating right because the more
direct it is the less argumentation or

13 00:12:00.000 --\> 00:13:00.000 discount that will be applied to the
value that you're creating for the business right does that make sense
hopefully it makes sense okay so if we are an employee and we want to
make more money then we're going to use our unique skills and
experiences and we're going to try and quantify to the highest degree
possible how we can directly impact the bottom line of the business
we're going to ask for variable compensation around the value that we
are providing for the business which just works the same if you're if
you're a business and we're going to be able to get it and this is the
the third piece here the reason that we're going to be able to get it is
because no one else can do it all right and that's the idea and so this
also kind of brings in that part that the bonus number four which is the
type of opportunity that you are pursuing in terms of the overarching
umbrella of business that you are working for will also dictate how much
you get paid right like if you work at a dry cleaning business it will
be very difficult for you to make a million dollars a year and that's
because the business doesn't make a million dollars a year in all
likelihood right and so your opportunity vehicle will always be a subset
of the business opportunity

14 00:13:00.000 --\> 00:14:00.000 that you're working underneath of and
i think this is a good thing to to hit on because uh what it takes which
is a great book by stuart uh stuart schwartzman stephen schwartzman star
the guy started blackstone okay anyways that guy all right he's worth 37
billion dollars today so he's pretty rich he's pretty good and what he
talks about is the idea and i think many other visionaries have said
this but you need to have a vision that is big enough for your business
that others people's visions fit inside of it and so what that really
means is that you need to have a pie that's big enough that everyone can
get wealthy and if you're operating in an opportunity vehicle that does
not allow other people to get wealthy then you will probably not attract
10 out of 10 talent and if you are 10 out of 10 talent then maybe you
should be looking for bigger visions bigger visionaries bigger companies
who have bigger goals and bigger dreams so that you can learn unique
expertise while working at those businesses because listening to uncle
warren there's only two things you should be working for whether you're
learning or you're earning right so you should get paid you should get
paid in one or two or ideally both ways when you work which you should
be learning all the time and

15 00:14:00.000 --\> 00:15:00.000 you should be earning right and it
should definitely at least be one of those two things and if you're not
learning and you're not earning you should stop working wherever you're
working all right which is why we're seeing a precipitous drop in i
would say frontline retail very generic workers last two months i think
we have eight million people quit their jobs in those kind of uh
frontline sectors because the opportunity was not big enough right and
so for us we can think about this as business owners when we're thinking
about our employees we can think we have as business owners as we're
communicating value to our customers which is how can i create the value
how can i how can i capture the value through my pricing and my ability
to negotiate and then how can i create a category once i'm not competing
it's everyone else's shitty prices and so as the employee we do the
exact same thing except our prices are the wages that we charge and so
in that way being a business business owner or an employee actually is
very similar it's just that we are just one degree separated from the
customer right so the business owner is closer to the customer than the
employee that works for the business from a value creation standpoint
business serves the customer employees search the business right and
they do

16 00:15:00.000 --\> 00:16:00.000 that i say that as a from a big
picture perspective even though the employee may directly be uh
servicing the customer they do it within the overarching infrastructure
of the business that exists all right and so right now if you want to
make more money you want to get paid more whether you are a business
owner or an employee think about how you measure up in each of those
three dynamics and if you're like how do i create more value i wrote a
book about it it's 99 cents you can grab it if you want it's on amazon
it's thousand five star reviews i think people like it at least or at
least they just like leaving five star reviews for it so either way i'm
cool with it um ideally they like it though but that's about the the
value creation your ability to negotiate honestly like you could have
all the tips in the world i'll tell you the simple simplest law of
negotiation is this he who has the most options wins the circumstance
and so your ability to get other customers your ability to have other
jobs if you're an employee those that you that you bring to the table
prior to your negotiation will give you all the leverage you need if you
have a hundred girls who are lined up to date you or a hundred guys who
are lined up to date you you have more leverage in the quote negotiation

17 00:16:00.000 --\> 00:17:00.000 if you have if hundreds of other
businesses who want you you have far more ability to negotiate which is
why people are like how does the ceo make 50 million dollar bonus or
whatever from his public traded companies he's like well do you know the
amount of guys who can do that specific job you can count on one hand in
the entire planet right and so that is why because the supply demand
dynamics for that specific role right and the value that's being created
and the percentage that they negotiate that's how that kind of money
gets created you can make obscene amounts of money as both a business
owner and or an employee as long as you understand those three dynamics
all right and as again the added bonded caveat to that is that those
guys can make that kind of money because they're operating within a
business that has a massive dream that is really to impact humanity
overall and lots of people can get wealthy in that both the owners and
the employees because in a lot of ways the compensation structure the
bonuses options things like that they structure are based on variable
compensation on the overall production of the business all right so um
lots of love everyone if you're new to mozzie nation welcome and i will
see you guys in the next video
