Rich or King?

0:00I got a question for you because you're talking about generational businesses. Would you rather be rich or king? Do you want me to define this? Yes. Okay. So would you rather be Microsoft or SAS Institute? SAS Institute? Do you know what SAS Institute is? I do not know SAS Institute. So I'll break it down for you. So the founders, so they started around the same time. Actually, it's called SAS Institute. They started a year before Microsoft started. I think up to - Before you go into it, I don't want to cut you off, but I am. Before you even go, just for shits and giggles, I'm going to go with Rich.

0:33Okay. Because almost always, if you ask me if I want to be rich or something else, unless it's unhealthy or something like that, I'm going to pick rich. Okay. I'm going to tell you why you're going to pick the other one eventually. So we'll just go with that. And I think I might actually rather be rich than king. I think you actually might want to be king. So let me break this down for you. So SaaS Institute was a data software company founded a year before Microsoft was founded. OK, as you know, Microsoft, when they were founded in, I think, late 70s or so, they went public pretty quickly. OK, so they started, you know, participating in public markets.

1:07Obviously, they had the, you know, you have shareholders, things like that. And Bill's equity, Bill Gates equity came down quite a bit. Right. And Paul Allen, the co-founders. Now, the co-founders of SAS Institute, they actually held on to the equity. They didn't raise outside funding or anything like that. They didn't go public. So I think going up to their very high points, I think Microsoft, I forgot what year this was. Microsoft got up to like$143 billion in revenue, okay? And SaaS Institute was$3 billion. Now, the difference is the founders kept, they were the cap table very much, right? There wasn't anyone else.

1:39Microsoft, obviously, there's way more people on the cap table. But the difference is you have a multi-trillion dollar company versus a company doing$3 billion a year in revenue. So in this case, the king is Microsoft at$143 billion, okay? And then you have$3 billion for the rich. Which one would you rather be? I'd rather be the$143 billion company. The king. You'd rather be the king. No, I consider that rich because you have more money. No, no, no. But king is like you own, you're like, you are better than rich. So king means in this definition. Oh, no, no, no. No, you're right. I actually had the other way around.

2:11Rich. So yeah, king is like you own the lion's share, the equity. So yeah, you're right. You'd rather be rich. Yeah. Yeah. Yeah, yeah, yeah. I want the number. I don't care if I own 10 % or 1%. Yeah. And actually, if I think about it now, would I rather want, like, 1 % of a watermelon or 100 % of a grape. But let's look at it this way. If king means you're on top, I don't know what definition you're using because it's a little bit confusing. King means you're in control. Okay. So control of the company or on top is you're the biggest player in the space? No, I think in this case, it's you have control and then from a cap table standpoint and you can make decisions quickly.

2:46Obviously, you can have a big company today and be like Mark Zuckerberg and have control. I'll take Rich. Yeah, which is what you said originally. With rich, you can make yourself a king. Yeah, which is fair. Which is fair. Go buy a new company and I'll control my destiny. I think, let me ask you this. Down the road, would you be receptive to a capital infusion? You've talked to people before. Yeah, I talk to people multiple times a year. It has to make sense. That's my take on it. The timing has to make sense and where we're going has to make sense. I speaking of Richard King the way I genuinely look at it for my life because I know it's unrealistic for me to be a Microsoft right yeah I'm not one I don't think I have that skill level as an entrepreneur or marketer but be the bigger thing that's going to stop me from doing creating a company of that size I'm in too small of a market compared to like a Microsoft the TAM is is too small.

3:43And if I look at my life, I've done okay. Can I make more money? Yes. Do I want more money? Yes. But I really look at a balance. I think after having kids, do I want billions of dollars? Yes. But I want billions of dollars with the balance when I'm older. And if you told me I could have double that at that age but there's no balance i wouldn't pick it because towards the end of my life i'm not going to remember i'm not going to die with the money take the billions with you yeah and there's a certain point where billions is enough whether i had billions or 10 billion like i don't have the ambition even if i had the money and i don't but if someone gave me the money and they're like you now have enough money to go buy the los angeles lakers or some sports team it's not of interest dude i get invited to games all the time i don't want to actually go drive to the arena and deal with all the foot traffic and have to sit there hassle it's a hassle i rather just watch on tv yeah no i'm the same way i'd rather stay at home today um i think your your ambitions change over time um but here's the other thing i was actually doing an exercise with uh chat chpd the other day i was like okay you're you saw where you're going with software where we're going with software, I'm like, well, I was like, I was arguing with it, right?

5:01I was like, the problem is like, you know, you look at like, don't get me wrong, these martech companies have done very well for themselves, like a Marketo in the past, right? But the problem is they are a pimple compared to like the largest software companies out there, right? So it's like, how do we make the argument here? It's like, okay, well, if you're building like the execution layer for whatever it is that you're solving, like marketing, for example, then you make the argument that you're kind of moving into like helping, you know, with headcount, for example, right? So I don't know where this ends up going, but maybe our TAM can expand.

5:29Maybe, but you said something earlier where your ambition changes as you grow older. For me, my ambition has not changed as I grow older. What's changed is what I'm willing to do to achieve the ambition. So I still have the same ambition and I want it and it actually grows where I want more and more. I'm just not willing to grind it out as hard as I used to when I had no kids and I was in my early 20s. But by default, Noah, doesn't that just mean he's less, he wants it less? That's a yes. But I want more. I want more. I want to achieve more. Yeah. I'm just not willing to grind it out as hard because I have other responsibilities in life.

6:10Yeah. Which means, you know, you might want it, but like the willingness has decreased. I look at it as two things. In my early 20s, I never imagined creating a company that would generate more than$100 million in annual revenue. My goal at that time was to build a company and maybe by the time I die, have$100 million in total savings. Liquid. Liquid. Yeah, yeah, yeah. That was my goal. And I worked way harder back then than I do now. Now, if you tell me, hey, maybe your goal is to be worth a billion dollars, I'd be like, eh, I want to generate, I have a company that generates a billion now dollars plus in revenue per year.

6:57So I want way more than I wanted back then. And I would say my, whatever you want to call it, I call it ambition or goals, whatever you want to call it, is actually gets worse each year where I want more. Yeah. But my I'll work smarter, but I'm not willing to grind it out and never see my kids. You know what it is? I think we underestimated the power of compounding in our 20s. Yes. I never thought about compounding in my 20s at all. And I know people told me like, oh, if you invest in the stock, it goes up over time. Or if you just get going with business. Yeah. When I was in my 20s, I was very short sighted with my thinking.

7:31Yeah. And maybe I am short sighted in my 40s as well. But maybe just a little less. We get a little less short-sighted with time. Yes. I don't really know what it is like to compound. And we were sitting with Yaniv a while ago. It was last week. Yeah. But Yaniv was talking about years in business. And I was asking him, 18 years, 18 years. That's a long time. I right now think about the 10-year mark with NP Digital. I haven't thought about 20 or 30, and I'm two years away from the 10-year mark. 18 years also with the same team. Look at that consistency. If you have the same team consistency and you do it for a very long time, it's inevitable, right?

8:15And then people might, going back to the - He has a good team. Very good team. Yeah, but if you have a shitty team and you're doing it for a long time. Yeah, well, that's on you. That's like a low IQ move, right? But going back to earlier, we were talking about the whole billionaire thing. It's unfathomable, I think, to the vast majority of people. But I think once you get to a number and you just keep compounding it over time, And we're not saying this is easy by any means. It's like, you can see it getting there, you know? And that to me is just a game, right? I think however big you can compound to is a function of your personal growth.

8:45That's kind of how I look at it as well. Yes, but you nailed one thing. You talk about IQ. So my kids go to a school where everyone has to take an IQ and you have to hit a minimum threshold to get in. What was it again? I think the minimum number is like a 136. Okay. Right? Which is very high. So if you don't hit 136, you don't get in. And there's some kids there, a lot of kids there who are much higher than 136. Have you done an IQ test? I haven't, but both my kids have because they needed it for the school. Yeah. So when going through this process and doing IQ tests, I've met a lot of parents who have wanted their kids to go to that school and they get them to take IQ tests, but they just don't qualify.

9:27Does it mean they're dumb? No. But you talk about low IQ. There's a lot of people, the majority of the people in this world don't have a high IQ and you can't do anything to fix it. And I've met a lot of entrepreneurs who have done really well with low IQ. I think the key is you find a business where you have an edge or you're competing with other people who aren't willing to do it. So you and I know Devin Soni. He's in a space of HVACs. and there's a lot of smart people in the HVAC business, but would you agree that most of the people who have really high IQs don't think about starting an HVAC business?

10:13In recent years, they've kind of piled into it, but yeah, before, no. Correct. And in recent years, when they piled into it, they still don't care to start an HVAC business. They're just buying up all the people who own an HVAC business, combining them and selling them for a higher multiple. He actually tries to understand the business and the ins and outs of it. Correct. And when I was talking to him early on about his growth rate for some of these H-Track businesses that he buys. And then in a year, they grow 30 % when they've been flat for many years. He's like, dude, he's like, the people who are running these businesses haven't tried a lot of stuff.

10:43They just haven't thought it through. And he's like, he's like, I just started thinking it through. And I thought about the other stuff. Then I started learning their business. And that's allowed him to become really deadly within that space. But I think you can still do well, even if you don't have a high IQ, you just got to figure out your vertical or your niche. You know, I shared a Charlie Munger quote this morning to my stories. And the whole premise of it is like, he knows many people in his life that don't necessarily have the highest IQ. They're not the smartest people. And I think he was even saying he's not necessarily the smartest person, even though I think he's very smart or was very smart.

11:18He was just like, no, like the most successful people are learning machines, whether it's you're reading all the time, whether it's you're talking to people, which is kind of your way of learning. They never stopped learning until the very end. And he's like, the way Berkshire Hathaway was shaped was because Warren Buffett was learning all the time, right? And I haven't seen for you or me, I don't think if there's anything we haven't slowed down on over the years, I don't think we've slowed down on our learning. The rate of learning hasn't stopped. Maybe your working style has changed a little bit, but not the rate of learning.

11:46And that's, I think, the most important thing. Rate of learning has not slowed down. I would say the biggest thing that has changed with our learning is we've shifted what we spend time learning about. No longer marketing tactics. No, we used to focus so heavily on marketing tactics and what you and I have gotten to a place in our careers in which we're like, we can just go hire the people to go focus and learn about different marketing tactics. We go spend our time on other things. So for example, I spend a lot of the last few years learning a lot about mergers and acquisitions, structuring deals, global integrating.

12:21And I would say you spent a lot of time on learning about AI, integrating within your business, trying to future-proof some of your systems, processes, and offerings for AI. A lot of time on recruiting. I would actually say that's the biggest thing I've seen you make a change over the last few years. Most people would probably say it's AI. I would say the number one thing that you've improved, in my opinion, is recruiting. You know what we should talk about? We should talk about our rate of focus in the beginning. So when I first met you, you were 25. I was 24, I think. Like, how focused do you think you were on a scale of 1 to 10 at that point?

12:55What most people would consider or what I would judge myself? Most people. That's a good call because you know we're both harsh critics. I would say most people, they would say we're focused from like a 30 % to 50 % range. At 25? Yes. Okay, how about at age 30? Let's go with 30 when I was in the early 20s, 50 by the time I was 30. And then let's go all the way up to now. So 40. 40. When I first started my business, the overwhelm was real. I didn't have the tools to help me scale. If only I had Shopify from the start to handle all the behind the scenes work. Shopify is the platform behind millions of businesses globally from huge names like Mattel and Gymshark to the smallest brands just getting started.

13:40The best part about it, it has everything you could need. Say you're ready to launch your own design studio. Shopify has hundreds of templates to create a beautiful store that matches your brand style. Or if you need help with content creation, Shopify has got AI tools that write your product descriptions, craft page headlines, and even enhance your product photos. Shopify 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.

14:10Sign 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. 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. Framer is the design first no code website builder that lets anyone ship a production ready site in minutes. I recently built a custom landing page in just a few hours, animations, fast load times, responsive layouts, all without writing a single line of code.

14:46It was easy to use and the end result was polished enough to look like a developer spent days on it. One of my favorite things is that Framer's AI handles translations with a single click. So your site can be up and running in multiple languages almost instantly. And with real-time collaboration, your whole team can jump in and work together. No issues with versions or miscommunication, whether you're starting from scratch or using one of their templates. Framer lets you focus on design while handling the technical side for you animations responsive layouts search optimization and all the things that matter ready to build a site that looks hand-coded without hiring a developer launch your site for free at framer.com and use code ms to get your first month of pro on the house that's framer.com promo code ms framer.com promo code ms rules and restrictions may apply 80 okay i think i was like when i first met you maybe it was like go one out of 10, 10%, okay?

15:38And then I think maybe 30, it was like 15%, okay? Go to 35, I think it was like 20%, okay? And this is interesting, because I talked to one of my engineers who's been with us for like eight, nine years or so. And he's like, dude, the focus in the beginning was like a two. He's like, it's like an eight now. I don't think it's quite an eight now. I think it's - Eight out of 10? Yeah, like 80%, right? And so now I'll ask you first, what do you think my focus is now percentage-wise? I'll give you 60. Yes. Somewhere around there. And the reason being is you still have two separate companies. Yeah, six zero, right?

16:12That's exactly. 60 out of 100. Yeah, that's where I peg us at. You're at 80 % right now, right? Yes. And I would say my biggest flaw is even though it's one company, I get distracted internally with things that I shouldn't focus time on. And a great example of this is you mentioned, hey, have you ever thought about raising money or taking outside money? Yes, people hit me up and I talked to them. but if I was truly focused, I wouldn't even waste my time talking to him. Yeah. You used to not respect your time. Now you respect your time a lot more. Neil used to sell courses where you get a free call for every course.

16:45I was like, that was really, and I was only 24 at the time. We're really young. I was like, what are you doing? So yeah. Yeah. 30 minute phone calls. But also you've been in business for how many years? An NPD or just overall, like I think since I was 16, 24 years. So in the very beginning, your focus was what? Like a one out of a hundred, right? Then like 10. So my point is like over time, you learn to focus more because in the beginning when we're younger. Actually, no, I would say when I first started, my focus was probably like 60, 70 out of 100. Okay. My focus started getting screwed up when I started making money.

17:15Yeah. Because you like to do everything. I remember there a period of time, I'm going to try. You saw things going well with online education. I'm going to do online education. I'm going to do this affiliate thing. I'm going to do this. Right. So it dropped down quite a bit for you. Yeah. But when people are young and starting their first business, they usually have decent focus because they can't afford to not have any focus. That's true. It screws up when we start making money. Like just think about when you started focusing less. It's when you started making more money. No, I never learned my lesson in the beginning.

17:39I was all over the place from the get-go because I thought, because here's the thing, once you have some money, once you think you have it figured out, you start to get a little more, oh, I feel I can do more. No, but let's go back. When you jumped into single grain, so for context here, Eric did not create single grain. It was started before him. He joined as a partner, but when you first got into it, I would say you had really good focus. It was as you started making more and more money, like millions, that's when your focus really started changing. You're missing a point. So I'll tell you what happened here.

18:12So there's a period of time when I first took over, we dropped all the way down to one employee. Thank God we were ranking number one for the keyword digital marketing agency because we're doing all these guest posts, right? What do you mean when you took over? So when I took over, it was 2014. I actually had disengaged from the business because I read the book, Let My People Go Surfing. So I disappeared from the business. So we dropped all the way down to one employee. Oh, you're talking about when you bought it. Yeah. When I bought it first started with Susan. Yeah. When I bought it. Yeah. And what happened afterwards, once I got it back, it was like a wake up call when the outside accounting firm was like, Hey, I think it might be time to shut it down.

18:43Right. Um, and then from 2015 to 2018 or 19, very focused there. And that was a point where it's like, there was actually a launchpad. And then I got unfocused again to your point. Yeah. To your point. Yeah. So you're, you're, you're, you're, you're partly right. Yeah. Yeah. Yeah. So I think this lesson's helpful for everyone because there's like ebbs and flows with focus and we learned over time. We're just hoping that you can learn that lesson sooner. And even if you're younger right now, you're probably gonna think that you can do everything. Trust me, you can't. I remember you talked about letting your team learn and learn from their mistakes because you mentioned a book to me back then.

19:17I don't know what it was called, but there was a book. Yeah. And you even quoted things like the IBM CEO making a mistake with some hire. They lost a million dollar mistake. Or a hundred million or something. Yeah. And I remember when Eric first told me about it, I'm not saying there's a right or wrong approach because I don't have a company the size of IBM, but my philosophy has always been fire. Hire the people that know this stuff. I don't have time for them to learn on my die. Yeah. Anyway, hopefully that's helpful for you guys. It applies to marketing too. Don't think you can do every channel.

19:47Don't think you can learn every channel. We're still very much SEOs. I would say I'm less SEO than anything else. I would say our base level skill is still SEO. Our base level skill is still SEO or GEO or AI SEO, whatever you want to call it. But we're much different now as people. So, yeah. I still write my copy for my landing pages. That's good. Like for our SaaS products, I rip apart all the landing pages they send to me. I can do that shit on my iPhone. Excuse my language. I just install the Grammarly app and I just type what I'm on to a plate. And I'm like, oh, does it sound good? And I can usually do the copy for a landing page, like a really important landing page, like a home screen or the pricing page.

20:22I can usually write the copy in like five, 10 minutes. I think it's SEO and conversion for you. Yes. And then I had to think about it, but within an hour, I'll have it fine-tuned because I can write the rough draft and then they keep going back and forth and then tweaking. Yeah. And then it's pretty good. See, back in the day when we're like 25, 24, Neil didn't have Grammarly, so he would just Skype me. So Neil would Skype me and then ask me, is this good? Is this headline good? Yes. Are you good there, Noah? All right, guys, that's it for today. Catch you later. Bye. And