The Growing Trends With Businesses (Shopify, Flexport, etc.)

0:00All right, Neil, do you know the trends with Shopify, Flexport? Or what do you think the growing trend is with all businesses right now, or a lot of great businesses? What do you think it is? A focus, B cost cutting. Okay. You're in the right vicinity. Yes, to both of those, right? But more than anything, when you look at Flexport, they hired a CEO who worked at Amazon, and he was a pro with logistics. So Flexport's like a logistics company. And they ended up attacking the guy recently. And that's just a good example of the chairman, who is one of the founders, Ryan. he stepped back into the company.

0:34So Ryan's back in. And so Shopify, they're focused on, when you look at it, it's like, okay, we're going to focus on cost cutting. They offloaded their deliver platform. And I think they gave it to Flexport and they partnered up with Amazon and they're just focused on delivering a good e-commerce experience. So my point of saying all this is like, the focus has led to cost cutting. It has led to the CEOs coming back to operate the businesses, right? It has led to a very low or almost zero tolerance for BS in a company. And the reason they're all doing this is they got to hit earnings and numbers.

1:07So I totally get why a lot of them are focused this way. And I don't really blame them. You know, at the end of the day, when you're publicly traded, a large organization and really well funded, you got to produce and production means more revenue and more profit. And if you're not making profit, at least becoming profitable. That's what the market's looking for. Investors, public markets, it doesn't matter. People want growth and they want growth with profitability. They don't want growth at all costs and no profitability. Well, I think the way for everyone to think about this too is interest rates are everything, right?

1:42So when interest rates are close to zero, then growth is everything. When interest rates are higher, which most people here aren't used to, including myself, then efficiency is everything. and everything basically revolves around interest rates because that affects how people spend and that affects businesses directly. It affects everything. How many businesses you can buy, the cost, how much you can invest. You know, for example, I was chilling with someone at the airport. I was on my way to Boston for HubSpot's event and they were telling me how they raised quite a bit of money. They bought over a billion dollars worth of companies.

2:13This is a big private equity fund, but this guy's a CEO and they do around a hundred million dollars in profit. and each year almost all their money goes to paying down debt like there's literally no money left over and when i say all the money going down to pay debt mainly the interest not the principal portion literally mainly the interest yep and so here's the other thing i'll say too is neil and i have mutual friends that have stepped back into their businesses right some have over you know they have thousands of employees and unfortunately they've had to cut and some have been out of the business for a year two years or so and they're back operating and it's extremely painful it's Like, you know, you can compare it to like eating glass over a period of time, even though I don't know what that feels like, but it's painful, right?

2:54One of our other friends, he was not operating one of his businesses for probably like three, four, five years or so. He's back in it, right? I'm very much back in it as well. Dude, I remember. I know who you're talking about. And I was like, why don't you use the iPad anymore? Because he taught me to use the iPad. It's super efficient. And then he was like, the business is a mess. I have no choice but to use a laptop now. I can't do enough on the iPad. It was even better than that. It was something that was shorter and you said it. I forgot what it was. It's like, no, it's like our business is too crappy for me to use an iPad right now.

3:24Yeah, it was something like that. Yeah, yeah. So look, I mean, at the end of the day, I think it's a good thing, right? Like I was talking to my coach yesterday and I know Neil doesn't like me working with coaches, but like it's very much a back to basics thing. And that's cool because it forces focus. And for someone like me that likes to dabble in a lot of different things, like it's nice, right? And I think this focus muscle is something that has been very needed for a long time. Because at the end of the day, if you want to build something really great, you just focus and let it compound for not 10 years, but 20 or 30 years.

3:54But what everyone really should end up doing is doubling down on what's working and pet the fat where you don't need to. I remember sitting with a guy years and years ago. He doesn't know me, but it was at like a group dinner. This is like over 10 years ago. His name is Brian Lee. He co-founded Shoe Dazzle with Kim Kardashian, Honest Company with Jessica Alba, LegalZoom, which was a success for him. And I remember talking to him. He's like, you should have laser focus. But the moment your growth slows down, then start, you know, expanding your focus into others. But until then, just continually have laser focus.

4:29Yep. Look, sometimes it's the boring stuff that wins. And that is it for today, guys. Please don't forget to rate, rate, rate, and subscribe. And we'll see you tomorrow.