The Lie That Keeps Entrepreneurs Broke | Ep 973
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
In this episode of The Game, Alex Hormozi dismantles the limiting belief that markets are "too saturated" or "too small" - which he identifies as the single biggest reason why entrepreneurs stay broke and businesses remain small. (03:33) He argues that 99% of people who claim market saturation are completely wrong, with most entrepreneurs tapping into less than 1% of their actual market potential. (04:03) Through detailed visual examples and personal stories, Hormozi demonstrates how entrepreneurs mistake their narrow slice of one advertising channel for the entire market, when in reality they're looking at their business "through a keyhole" rather than seeing the massive door of opportunity in front of them. (04:15) He provides concrete strategies for market expansion, from local businesses to online ventures, while addressing the psychology behind why people protect their egos by blaming external factors rather than developing the skills needed to capture larger market share.
Main Theme: The vast majority of entrepreneurs dramatically underestimate their total addressable market and use "market saturation" as an ego-protecting excuse for their lack of marketing skills and growth strategy.
Speakers
Alex Hormozi
Alex Hormozi is an entrepreneur, founder, investor, author, public speaker, and content creator focused on helping businesses scale from $100M to $1B in net worth. He previously built and scaled gym launch to significant revenue before expanding into broader business education and investment through Acquisition.com. Hormozi is known for his direct, no-nonsense approach to business strategy and has authored books on business growth and market positioning.
Key Takeaways
Stop Using Market Saturation as an Ego Shield
Most entrepreneurs claim their market is saturated when their real problem is lack of advertising skill. (05:02) Hormozi explains that when people say they can't scale their ads past $1000/day because they've "saturated their market," the reality is they only know how to advertise to one avatar that already understands their solution. They lack the skills to reach the much larger market of people who could benefit from their product but aren't yet aware of the solution. Instead of admitting skill deficiency, entrepreneurs protect their ego by blaming external market conditions.
Your Market Slice is Microscopic Compared to Total Opportunity
Entrepreneurs typically operate in one tiny slice of one platform and mistake this for the entire market. (08:17) Hormozi illustrates how when competitors enter what seems like "your" market, you think the pie gets divided smaller. In reality, you're competing in such a minuscule portion of the total attention and platforms available that competitor impact is negligible. The visual he provides shows dozens of platforms, outreach methods, and advertising channels that most businesses never touch - from Instagram to direct mail to phone calls to radio ads.
Red Oceans Signal Big Rewards, Not Reasons to Avoid
Highly competitive markets often indicate the biggest opportunities, not markets to avoid. (10:46) Hormozi points out that he entered the extremely crowded business advice space and succeeded specifically because "where there's the fiercest competition, there's also oftentimes the biggest rewards." The presence of many competitors validates that there's substantial money to be made in that space - otherwise, smart business people wouldn't be fighting for position there.
Follow the Puddle-to-Ocean Expansion Strategy
Start by dominating a small niche (puddle) before expanding to broader markets (ocean). (11:28) Hormozi reconciles the apparent contradiction between "riches are in niches" and going after large markets by explaining it's a progression: be the biggest fish in a small pond first, then move to larger ponds as your skills and resources grow. This strategy allows you to charge premium prices in the niche while building the capabilities needed to compete in broader markets later.
Reframe Problems to Maintain Personal Control
Transform external blame statements into internal skill development opportunities. (27:34) Instead of saying "there are no good salespeople in my market" or "leads cost too much," reframe these as "I don't have the skill to attract, hire, and manage good salespeople" or "I don't have the skill to get more leads cost-effectively." This mental shift puts you in control of the outcome and creates a clear path forward through skill development rather than leaving you powerless against external forces.
Statistics & Facts
- 99% of people who claim market saturation are completely wrong, according to Hormozi's experience working with entrepreneurs. (03:47)
- The average entrepreneur has tapped into less than 1% of their actual market potential, despite believing they've exhausted their opportunities. (04:03)
- Local businesses may need to use multiple marketing channels if they're in markets with fewer than 50,000 people in a 10-mile radius, as an exception to the "one channel until $1M" rule. (18:32)
