Big Entrepreneur Lessons From Partnerships, It's Time To Double Down, Fascinating Data From Meta's Lawsuit, When You Feel Like You Are Getting Beat

0:04All right, so let's talk about big entrepreneur lessons from partnerships. So who you end up choosing, not only for marriage, but also in business is ultra important. And Neil and I have had our handful of partnerships. And we're just talking about, you know, some situations that we're dealing with or have dealt with. And so I think we'd share some stories here because you guys like the stories. Yeah, Eric and I have been partners together on a few different ventures over the years. I remember one venture we were in, someone stole even money from a corporate account of ours. and the reason I bring up this one is in partnerships no matter who your partner is how close they are you should always have checks and balances within your bank accounts and the easiest thing to do is require multiple signatures for money to be spent even then you can still have fraud you like a great example of this is in one of my entities we have multiple signatures someone pulled out 900 grand-ish I believe and when you look at like the 900 grand that's a lot of money it's not going to break or you know hurt us we can pop in more money from one of our other entities and just this was an international entity and just fund it with more cash and then you just go through the normal legal routes and go after assets and freeze people's assets you know follow criminal charges, etc.

1:27Typically, you can recuperate, but just checks and balances. And then what we've learned over the years is we try to get people at least on the money end, onto our banking system. And then when you have multiple transactions, anything over a certain dollar amount gets triggered to another person and you start having more things in place, where it makes it harder for people to just ever take money from you. You also, I mean, you need multiple signers, but also you need checks and balances in terms of approvers. So you might need two approvers to let it go through. And because you have that set up with Chase, right?

2:02That's what we do with Chase. We have multiple signers. And then I believe someone gets a phone call. Over a certain amount, my co-founder, I get a phone call to approve it. Internally, even if there's two signers, our CFO typically gets a call for approval as well. over a certain amount, not like five grand or 10 grand, but a larger amount. I think a big thing too is when I think about you and Mike, for example, like Mike, I know is a good person, but a lot of people in the world, good person, you can't partner with them just because they're good people. He's a good person. Plus also he works really hard.

2:36And I look at it as, so they have to work really hard. They also have to be good people too. And a lot of the values have to align with yours. It doesn't have to be picture perfect, but at least those things need to align. Right. And so when I think about you, I don't need to worry about you working because you're just going to be working all the time. When I think about like my co-founder on the software side, I know I'm going to be working all the time. I know if I'm messaging at 10 p.m., he's going to respond. You message at 8 p.m., it's good. Messaging him at 5 a.m., he's going to respond, right?

3:01That is very hard to find in people. And if they're good people, like Warren Buffett likes to talk about you want to find people with integrity, intelligence, and energy, right? But if they don't have the integrity piece, the other two don't even matter. And so you and I have had situations where we've worked with people where the integrity is not there, or you can say the humility is not there, and they start to think about them, them, them, them, them, and then that ruins everything. Because when they start to become selfish or entitled, that ruins everything. There's a whole other discussion we can have.

3:29I could talk about a little YPO dinner I did yesterday, but let's talk a little more about these lessons from partnerships and how to pick the right partners. Because I think you had a great partnership with Heaton, even though eventually you guys went your separate ways. You guys are still family, right? I think it was still a really great partnership. So maybe there's some other lessons you can share before we move on. Yeah, I'll share one on that one in which you want to pick someone who compliments you. So like if you look at Heathen, he understands engineering, product, usability. He's better at innovating than I am.

4:00I'm better at marketing and sales. If you look at my partnership with Mike, he's better at operations, recruiting and sales over me and people. He's much better with people. you know and then the other thing i've learned from partners is you got to be careful where they're located a great example of this is you and i are both in california if something goes wrong the court systems we understand like when i was giving the example of like the 900 grand being pulled from me it wasn't checks and balances i learned from the lesson that we had when we lost money from our account years and years ago so i haven't really had issues in which people taking money other than the more recent one of 900-ish grand.

4:41But you're talking about in a country where there's corruption. So when you have partners in other countries, even though technically they shouldn't have been able to do this, you got to deal with people bribing others and things like that. It's just like Sequoia. Sequoia picks amazing companies or it bets on amazing companies and picks amazing partners because I look at the people they invest in, they are partners to them and they're writing checks of billions of dollars in aggregate and what do they do with China and India they pulled out it's no longer Sequoia in India and it's no longer Sequoia in China it's rebranded to something else they had a lot of corruption issues in both countries in which people were faking numbers and all this kind of stuff that's an example of picking bad partners but sometimes it's hard to vet them and what makes it really hard is when you're dealing with other countries cultures are different and the way people operate are different and the laws aren't as black and white as they may be in the united states is there anything you would have you would have done differently with this recent partnership the only thing that i would have done differently is and i i started doing this with np digital you can now end up it costs quite a bit of money but you can end up having like we use bank of America for a lot of our global bank accounts.

6:01For US, we use CIBC combined with Wells Fargo, but we mainly use CIBC. And CIBC has been a great partner. I would have been using Bank of America internationally much more. And Bank of America is a US bank. So people are probably wondering how the heck is Bank of America in other countries? Well, what they do is they partner with local banks in every single country. So you can log into your Bank of America interface and control everything and you have access to everything with a click of a button between countries you can transfer money and we do all this kind of stuff but i would have set that up from day one versus setting it up years later because i could have saved a lot of money from people dealing stuff like you can go into a bank in a different country and no joke even if you own all of it they'll be like oh they're fighting with each other you know just listen to this guy because that guy's local and i'm not saying people are bribing each other but you have to deal with that like when we're talking with the police you know people are telling me like oh we have to get to the right person so that way they can't be paid off and i was like huh what i never guessed this is still problems in today's world yeah well it's human nature i think it'll always be a problem for at least the foreseeable future but so are you saying if you do bank of america internationally They're partnered with all these local banks.

7:18And then, but these partnerships, Bank of America says, hey, we still want our security features and everything. And you go through Bank of America's interface for their, you know, treasury accounts. So Bank of America will cover you. They'll protect you. Yeah, you don't have to worry about anything. But none of these other banks do it. Chase doesn't do it. Chase does do it. Yeah, I have to imagine. Wells Fargo does not do it. I can see that too. US Bank does not do it from my understanding. There's not too many actually options for global banking. Yeah. But going back to what we said, too, I think, you know, sometimes I think it's harder to vet these international partners, which is why I think if you're going to partner with someone, you have to meet them in person.

7:50And I do think this is a situation where you have to wine and dine them and meet their family and everything and spend extended time with them. Dude, I've done all that. And even then, it's still not enough, right? Ideally, it's with someone that you've known for a long time. So, like, I've known you for a long time or like this other guy that Sean, who I'm a partner with, I've known him for a long time, too. So, over a long period of time, people show who they are. over a condensed period even if they meet you for 24 hours or whatever you can put up a front yeah but we've known each other for a long time we've had businesses with other people that we've known for a long time and we still had issues and like stealing and stuff like that people may not see it as stealing but in theory taking money that is not yours is in essence considered that yeah but you know at least we know now so it is what it is yeah yeah okay well that's that's that's good um and i would go back if i had to re-emphasize one thing on picking right partners to double down on what you said in the beginning you have to pick people with the same values you and i work a lot if one of us did not work a lot and then we wanted a partnership one of us would grumble the person who's not working is going to be chill but the person who's working a lot is going to be pissed off eventually yeah that someone because there's resentment there's resentment okay i'll give you another example on partnerships so i i had partnered with actually I've tried partnering with a handful of high school friends, like different high school friends, so nobody can pin this on anybody.

9:10But I remember one time I was working on a software with a high school friend. And then this was when Snap was a big thing, Snapchat, right? And I looked at his Snapchat and I noticed he wasn't working, but he was making meatballs. And I got so pissed. I was like, he's bragging about his meatballs and he's not working right. And I'm here busting my ass. And there's a handful of, and I realized these partnerships didn't work out, not because these These people are bad people, but they didn't want to work hard. And that's OK. Like much less than one percent of people want to work that. Right. And so you have to understand.

9:41And by the way, we have our core values at our company. Do you know what your MP Digital core values are? I know some of them. Here's the thing. Like what I want to call it here is I know the core values of my company, but not necessarily my core values are going to align with Neil's core values. I'm going to give you my core values right now. Right. So the company's core values are to learn relentlessly, which I think you do have just in a different way. I do think you talk to a lot of people. Right. That's one. You agree. Yeah, I can pull them up right now. It's on our page. Let me finish while you pull it up.

10:06Okay. A bias to action. I actually think you have that. So I need to do things, right? Like if I hear something, I just want to do it. The third thing for us is to be unreasonably resilient. Actually, I think you have that too. So it's like you can take a beat down, right? And then the fourth one is to make bold long-term bets. I think you have that too, just in different ways. So go ahead, name yours. So we have three values listed on our website. these are already new but i know we have more values than the three that are listed on our website because in our old office pre-covid we would have stickers everywhere of our values the the first one that's listed on our website is think big self-explanatory we want people to all of your people think big no there's no way when you scale organization to more than maybe like 500 ish i would have to guess is when we started hiring people not necessarily who didn't believe in our core values, but you need to fill seats sometimes in certain roles.

11:04And you know that someone may not align with everything, but they're in a position where it doesn't matter. Like they may be just an assistant. I'm making it up, right? Where you don't need them to have all these values. You just need to do one thing really well. The line you said, I think is true and it holds true today. I hope the line that you said does not hold true in the future. I hope it doesn't. We'll see. And it gets worse as you get bigger. Like, I hate to say it. We're a thousand plus. There's no way everyone has the same values. And I'm not saying we did a terrible job of it because of that.

11:39I think we can, of course, do a better job, but there's no way everyone at Facebook or Microsoft or Apple, you know, believes in their values. A lot of them just go with the stock. Stock does well. They're happy. Stock goes down. They're sad. We'll finish. Okay. Think big as one. Our second one is own it, right? So this one I'm really big on. So is Mike. You do something wrong, own it, learn from it, improve. Don't make the same mistake over and over again, right? Have fun. If you're not enjoying what you're doing, we believe that you shouldn't be working. And the reason being is the people who enjoy what they're doing.

12:12And this also goes back to partners. If you both don't enjoy what you're doing or including the business idea, you're not going to spend the time and effort. and we believe that when people have fun and they enjoy working they'll put in a ton of energy and they'll work non-stop like for example my team and I a lot of us were up at three something in the morning today I wake up at four so 3 15 wasn't a stretch but I had to put on the alarm for 3 15 and it was because we're terminating someone within a country and they had a major role and I had to send out an email to everyone within that country letting them know then you got to deal with email and security and people align.

12:50And it's just like, cool. Everyone had to be up in the US just to double check that nothing's happening wrong within that country. Is anybody flying over there? No, we have a managing director on the ground. We have lieutenants there, but we have three people who have visas that are on standby in case they need a flying case. Something goes wrong in the next week or two, but we don't think anyone will need to. It's just a question of time. Interesting. If you've ever built a website, you know how tough it can be to keep a strong design while ensuring site performance is fast. That's where Framer comes in and it totally changes the game.

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14:55Shopify lets you easily create email and social media campaigns to reach customers wherever they are, whether they're scrolling or strolling. If you're ready to sell, you're ready for Shopify. Turn your big business idea into with Shopify on your side. Sign up for your$1 per month trial and start selling today at Shopify.com slash marketing school. Go to Shopify.com slash marketing school. Shopify.com slash marketing school. All right. So that's what we have around partnerships. Hopefully you guys found that helpful. Actually, I mean, partnerships, what we're kind of talking about here is a potential lawsuit, right?

15:29Did you see the meta lawsuit? So not the Meta lawsuit, but basically the government going after Meta. Yeah, to split them up. And they talked about how Instagram at one point, Meta was thinking about splitting up Instagram. Yeah, there's just some interesting data here. So I'm just showing you. And so this post from Mostly Borrowed Ideas says, lots of fascinating data points from Meta today. These are the ones that stood out most. So percent of time spent viewing content posted by friends. On Facebook, it's only 17%. And on Instagram, it's even smaller, 7%. So these used to be about connecting with your friends.

16:00Now it just shows it's more of a social graph than anything, right? Which is what we've been talking about. And then TikTok ban. So once that happened, the TikTok ban, Instagram usage increased dramatically. So the first time it happened, you can see TikTok ban over here. That was whatever date this was, 2025? Oh, yeah, this is all the way in 2024. You can see the first time it happened, usage shoots up. And then I think like, I don't know, a couple weeks later, it shoots up again. But it just shows the effect of like TikTok, like how big it is. And then what would happen to it if it fully got banned?

16:28It would just move over to Instagram. yeah you saw what happened in india right no because india fully banned tiktok uh-huh so then instagram shot up exploded yeah and then a company called verse they have an app called josh which is a tiktok clone and i think they got funding from tiktok in the past billions and billions and billions in valuation right they raise a lot of capital and they exploded and they rode the coattails of tiktok being banned oh so they got to benefit from it sometimes you just have to be in the right place at the right time yeah but in that market instagram is crushing it because they've been no more known yeah okay look so what percent of people do you think want to consume video today this is facebook us video time spent i know it's more than 80 percent of the content consumed on the internet right now is video i don't know the time check this out January 15th, it was 10 % of Facebook time spent, right?

17:21Now it's over 55%. And this is Facebook. You and I probably don't use Facebook. I don't really log in. This one I didn't really understand, but consumer surplus analysis. Only question is how many billion. So total consumer surplus is 38.5 to 110 billion per year, which I think is a very large number. And so I don't really understand this. I don't know if you understand this, but I'm just going to move on from it. But anyway, I think these are just interesting facts. And, you know, we'll see how that quote unquote lawsuit plays out. Yeah, I don't think Facebook is going to get split apart. And if they do get split apart, how does it look when Mark Zuckerberg testifies to Congress and says, I get you want to split us apart.

18:01But before we bought WhatsApp and Instagram, we asked for your approval and you guys approved it and you told us it was OK. what i think people forget about facebook is instagram would have grown to be a app that was popular but it wouldn't have grown to where it is today without facebook's network and reach same thing with youtube and yes youtube and google and same with whatsapp and facebook so it's just like yeah they're really big but they're really big because whatsapp grew them and now they're faulting them for growing these businesses when they're the ones who have proved that they can buy them just i think just gets reinforced over time people hate success like no matter how i see it people hate success right and so anyway let we i want to go back into um you have this highlighted over here when you feel like you're getting beat it's time to double down because this is interesting i i was at the gym today i was listening there's this great podcast called operators and these are all e-commerce guys right and i think they're all nine-figure e-commerce guys are just talking about how the tariffs are affecting them and this is like another 2020 moment for them they're not buying more inventory right now and like you know um it's buckle up right but the general sentiment i get from them too is they're feeling like they're getting beat but this is a time where you get stronger too so go for i don't know what what where you're coming from from this one but it just reminded me of that yeah when times get tough keep in mind it's not just tough for you it's tough your competition as well so for example i genuinely feel beaten dog syndrome in my business for the last three years.

19:30I've never even heard of that beaten dog syndrome. Yeah. So we just continually feel like we've just been beaten and beaten and beaten and kicked, but we're still growing. It's painful though. It's painful for our competition as well. By the way, beaten dog syndrome, while not an official diagnosis, refers to the behavioral and emotional consequences that dog can experience after being subjected to abuse or neglect. Yeah. Continue. All right. So I learned that saying from people who are much older than me. I never heard it from anyone. The Indian saying? No, I heard it from people who are Caucasian.

20:03That's at least where I got it from. I never heard it before then. All right. And they're much older than me. But yeah, I think when you're hurting, like if you look at agencies all around the world, they're hurting. I don't know. I don't care what anyone says. I haven't met one agency that's growing. Some people tell me like, oh yeah, look at this agency. They're doing 4 million a year. They're growing to 500 million. We're going to meet a lot of agencies next week. 30 to 35 % of the attendees. Oh, wow. and when people tell me that I'm like bullshit everyone's getting hurt right now and I'm like if everyone's getting hurt this is the time to double down and if I look at my business at NP Digital when you have a thousand plus people you're always in a lawsuit with someone right and so often that a half the times I don't even know what they are like I just learned we settled a lawsuit for forty thousand dollars and I was like what lawsuit and they're like oh this company went bankrupt one of our mutual friends he had a pharmaceutical company and they were a client of ours so they were trying to recuperate money even though we have expenses we just do it and he was trying to recoup money the lawyers the lawyers oh the lawyers so i was like okay so we settled because bankruptcy court but you're always in something that or going through m &a or someone trying to take money from your bank account or having bad business partners or you even had someone in your organization at one point who's trying to take your customers and go do their own thing yeah right yeah and this is like when stuff's going bad and it's going bad for you and the competition that's the best time to double down it hurts more but that's how you come ahead because at that point in time no one else is really doing things like spending more marketing or reinvesting or acquiring companies.

21:46And that's when you find the deals. It hurts more spending when you're hurting. But then when things start getting better, you start climbing ahead and growing much faster than everyone else. The shitty part is when you keep getting beat, you don't know when it's going to get better. So you have to be willing to take the pain. If you think it's a year, expect two or three. If you think it's two or three years, expect four to six, at least double. Yeah, so here's the thing. So people right now are talking about how the Chinese are not going to respond to the terrorists because there's two words that are embedded into our culture.

22:20And it's funny. I listen to a podcast and there's like, yeah, these Chinese people use the two words. I'll tell you what those two words are. It's tsuku. Tsuku means you know how to eat pain, right? It's like, literally, it's a thing. Like, the resilience is beaten into you and we can hold out for so long. And that's why moments like this, I mean, in 2021, you knew I was going through a lot of stuff in 2021, even a couple of times, right? And I felt like I was getting attacked on all ends. I mean, you have you have these saboteurs internally doing all these things and then you have you've acquired these companies.

22:48You haven't vetted the people. So then you have like it's like a clown show. Right. And it was it was thing after thing after thing. So but never stopped in that moment. Even right now, there's there's personal stuff happening in my life. And it's like but, you know, these moments, there's going to be chapters where you grow, but you're going to get better over time if you don't give up. And that's why Warren Buffett just and Charlie Munger, late Charlie Munger has said this. It's, you know, whatever tragedy happens to you, you have to keep going. You can't let one thing beat you down because you can't let one tragedy beget another tragedy.

23:19Same in business, same in personal stuff. You have to keep going. And I don't know that this is I think it's probably the same for you. This is when I thrive. And so what I mentioned before, I don't lose sleep in these moments. Like I look at my sleep metrics like with the business stuff. It's good. Right. But when personal stuff happens, by the way, the sleep metrics get worse. But it's so it's interesting, at least for my observations. But it is time to double down and it is time to build resilience. But anyway, guys, hope you guys enjoyed that session. That is it for today. We're going to be recording in Miami using my DJ Osmo next week.

23:49Neil and I will be. And we'll see you in Miami.