A Masterclass On Flipping DTC Brands For Millions With Mehtab Bhogal

29:46So to summarize, you want a low consideration period and you want something that can be made in America because it has some type of manufacturing moat. Anything else? Well, we don't actually care about the consideration period. I think it's just like a natural challenge in any vertical that you get into, right? If that's there. But for us, we only really care about the manufacturing end now. And then obviously the way we enter the deal is really important too. And that just, you know, if you pay next to nothing for something, the odds of making it work and making money on it are much, much higher than if you overpay on entry.

30:19I want to talk about this agency stuff because the interesting thing about people like you in the DTC world is they're oftentimes really, really good at acquiring customers because it's kind of like the DTC folks oftentimes are pretty good now. Before, it was the gaming company. So if you met someone from a gaming company or from the ad tech world, that meant that their internet marketing chops were pretty good. But now that D2C or now that Facebook is harder to buy ads on, the people who are succeeding oftentimes are quite good at that. And Sean and I have a bunch of friends who are starting recruiting companies.

30:56Which is really interesting because recruiting companies isn't new. Outsourcing isn't new. But people are putting sexy new packaging on it. And I guess from what I'm guessing, because you have it on here, is they're doing a really good job or historically have done a poor job of acquiring customers. and you want to apply that to that space. Is that right? Yeah, I just think it's a really interesting space in general. But I think some of these agencies are really heavily focused on, say, the Philippines or other countries in Southeast Asia. We've noticed there's a lot higher quality talent in places like Mexico, and you don't lose the same negatives associated with hiring in the Philippines are not there in Mexico.

31:35So for example, you could build an office out there and fly out and be there in person in a few hours if you live in Texas, right? and the wage disparity is not as high as you would think for really really good talent you're only paying a large number but you know it's not actually that bad a 30 percent more than you would be for someone who's great in the philippines maybe 40 percent more in mexico but again you can visit them in person which is really big you can have them fly out and again it's big for us because we do a lot of manufacturing right so they can actually understand the product or interact with the team in person so your retention goes up the quality of work is much higher and we found the quality of applicants is much, much higher in Mexico too.

32:12So if I did start an agency, it would be focused on solely talent in Mexico. And just for example, when we're hiring a customer service role, like a new manager or director, we're getting people who used to head up Uline. Are you guys familiar with Uline? I just use it to buy like boxes. Yeah. We use it a ton for like when we had our warehouse. Yeah. So their customer service is awesome, but we got one of their former directors and his salary ask was really reasonable. It was like, I think$5 ,000 a month, but his talent was the equivalent of someone who's$200 ,000 in the US. I can't find this client info.

32:46Have you heard of HubSpot? HubSpot is a CRM platform, so it shares its data across every application. Every team can stay aligned. No out-of-sync spreadsheets or dueling databases. HubSpot, grow better. Yeah, you have one agency idea on here that I think is a no-brainer, which is site speed. So we have this problem with our store, but I think everybody has this problem. Like basically, if you're selling something on the internet, one of the easiest levers, the biggest levers you have is your site speed. Because if you have a slow loading thing, you're just going to lose traffic. You're going to lose customers.

33:24As you have a slow loading page, you're also going to suffer in terms of your Google rank because Google takes into account your page speed as well. And it's really easy in the e-com space to have slow pages because what happens is you start with a Shopify store, you install 15 plugins just to get your Shopify store to do anything because you can't basically run a Shopify store just out of the box. You're going to end up installing a bunch of apps and each app injects a bunch of code into your page. And even if you delete the app, the code stays. You have to manually clean that up, which is kind of insane and probably a business of its own.

34:00But basically, site speed is a problem that we, I think we've hired three different folks to try to fix our site speed. And all of them, I'm like, they claim to do something. I have no idea really if they're, if they're doing a great job or not. I don't think that they are because the next guy comes in and says, oh man, your site speed sucks. Let me fix it. So, so I think this is a, this is a product that I wish existed and I think could clean up because it's a, it's clearly accretive to the person, but explain your thinking on it. What did I miss? Yeah. So it doesn't really require much in terms of dev skill.

34:32It's not like you don't have to be great at the dev end to actually do most of these changes. And it's almost like a checklist that's very portable company to company to company. It applies very cleanly. So for example, changing the order in which your pixels fire for Google Analytics, Facebook ads, et cetera, you can delay some of those very slightly and dramatically increased site speed and it won't really hurt the business that much. That's just an example of one quick fix you could do. Or certain apps do not compress images properly. So judge me, the review app on Shopify for a lot of sites, it does not properly compress images.

35:03So if you just apply more compression to those images, your site speed goes up at the product display page level or wherever those reviews are. How would you acquire new customers for this? Honestly, I would probably just go. Have you guys used BuiltWith before? Yeah, we love it. Yeah, just go to BuiltWith, full list of websites, make sure they're doing a certain amount of revenue or at least have meaningful revenue coming in. Just cross check that against. suddenly it shows traffic, right? Like Alexa or something. And from there, I think you would just pin them if their site's slow, right? Yeah, just cold email, I think is the way to go with this.

35:38If somebody out there wants to do a site speed shop, just DM me because this is a no-brainer. I'll be your first customer. I'll help you get the next 10 because every store has this. You could charge purely on contingency too. It's really cool because you can see a black and white effect if you've done a good job. And again, it's really easy to do a good job. It's just nobody specializes in this for some reason. Yeah, and it's a moving target. Like, you'll do it, and then like 6 to 12 months later, they'll need it again because they've installed a few more things. They hired somebody who didn't know how to compress images before putting it up.

36:10They started using this new tracking software for heat maps, and then boom, now you need it again because you've gone from an A rank back to a C. C rank on these site speed graders that are out there. I'm surprised the site speed graders don't have these agencies. or maybe they do. I haven't actually looked, but like does GT Matrix or one of these companies that have the site speed score, do they not offer a button that says, by the way, we could fix this for you? No, they should though, to your point. Oh my God. It's really easy, especially if all these e-commerce sites are on Shopify, right?

36:42It's very checklist. Yeah, so that's the other move. You should buy that site. You should buy the site speed site that checks the speed and then just add this button at the end. That's the agency service to fix the problem if they don't do that already. That's kind of crazy. How are you balancing your time? It seems like you've got a bunch of stuff going on. And I mean, you know, ideas are worthless, but it seems like a pretty good idea to me when I'm hearing this. I'm like, oh, that's kind of interesting. I actually seem like that has legs. You've got a good network. You could probably spin something up fairly quickly and scale nicely.

37:16How are you balancing doing everything that you're doing? About 15 % of my time, some of the investment and they're managing our minority equity and credit positions. and then the rest of the time is just spent on the floral business. There's a pretty big lever that we're pulling right now with booting up another operating base, like a manufacturing base in Mexico. And that'll get our EBITDA to kind of five or six million. And then from there, it's a pretty good valuation. So we just want to get that over the hump. Then I'll probably slowly phase out. But my co-founder is solely involved in that company.

37:43And that's called Solo Wood Flowers? Yeah, yeah. Sam, when I met Metab, I heard what he was doing. I was like, Like I told him two things. I think I go, how do I invest in this? Because if you're willing to go down and move to Mexico and build your manufacturing facility, you're going to win. Like Paul Graham has this essay that he wrote called like Schlepp. And he basically describes the guys from Stripe as being willing to do the Schlepp work. And he's like, you know, in a lot of businesses, there's basically some amount of Schlepp that you have to do. and for Stripe, they had to do all this like banking stuff that was kind of like annoying and bureaucratic, but they didn't really view it that way.

38:25They were, A, they were so young, they didn't really know what all was gonna happen. They didn't really realize how much they would have to do and B, they were just willing to do it. And you are willing to do the schlep. Like you're like, oh, you're like, I'm looking for operationally intensive things. That's the opposite of what I'm interested in. I'm like, I want the least operationally intensive thing, but I get why you would want it because it's super defensible once you have it. It's very valuable once you do it. It's very simple once it's fully set up, if that makes sense. Once you have like the best practices from lean manufacturing running, it's very simple to keep a manufacturer running versus like a D2C brand that's really reliant on the marketing end, right?

39:03Yeah, exactly. And so I told you, I remember being like, hey, can I invest in your Mexico thing, like your facility there? I think that's a great idea. And then I also told you, I was like, man, I feel like you play the game on hard mode. You're super smart. and you are like, I'm going to go do distressed turnarounds of DTC businesses. That's like multiplying three hard things together. And I was like, why do you do this? You could just, you know, there's easier options. And you were like, no, I like this. I like, you know, playing in the mud. Once you get a really good deal, you can't go back.

39:35I'm Indian. I need to get a good deal. I need to get a good price. Yeah, I think that's actually what it is. I think it's genetic that you're like, oh, you know the best deal possible? A company that's burning to the ground. Exactly. You can get it for nothing. You're also, I'm trying to find it, but so your website's really good. But you have this blog post or you have a bunch of blog posts on Medium. So Carta Ventures, Carta with a K. It should be on Substack now. I killed the Medium. Oh, well, I found it on Medium. But yeah, it looks like it is also on Substack. but you're really good with language.

40:10So your thing starts off with... Your first sentence is just good. This is a guide intended to give distressed e-commerce heavy businesses

40:21with$10 to$15 million in revenue, a high-level overview of turnaround management basics and resources to dive into. That's a great first sentence. You're telling me exactly what I'm getting. And then you do a really good job of explaining your background with Alex, your co-founder. You say you started these things in your early 20s. you took passive roles or you sold them. And then you like help turn around ice.com, which is now called ice trends. You met on Reddit. And then you say, we welcome complex opportunities that others are unable or unwilling to tackle. As a result, we can invest in non-control opportunities.

40:53We can grow quickly. But you just basically say, Oh, here's another good line. My team and I are responsive, discreet, and avoid pointless formalities. We understand how critical speed is both in turnaround and high growth environment. And we can tell you within 24 hours, if we're a fit. And so you just do a really good job of being very crystal clear about what your offering is. And you are direct, but you're not rude. And you have a really good voice. And you also cite a lot of the books that you've read. So you talk about turnaround corporate artistry. And you have a quote from the book. And so anyway, your language is wonderful.

41:28Sean said he pays attention to vocabulary. So do I. You have really good words. And your rhythm is nice. what did you read to kind of come up with your perspective and uh how did you how did you become a good writer you're you're quite good at explaining complex things i think we all grew up during the era of hardcore i don't know what it was but for some reason copywriting and being into copywriting was really popular from 2010 to 2013 maybe earlier what did you uh what did you learn for that or where did you turn to for that uh one of my friends was just really into it so i got dragged into it too and just reading random books i think there was a compilation of like 100 of the all-time best sales letters.

42:04That's back when people used to distribute swipe files and stuff like that. So you'd just be in a random group and someone would just distribute it and you just rip through it. And that's kind of how I picked it up. It's good. You're very good. And what were some of the other books that you read to learn this topic? Because you learned this at a very young age. Yeah, I'd say Corporate Turnaround Artistry is one of the greatest books ever. But it's written by my mentor, Jeff Sands. And that guy is an absolute beast. He's turned around a handful of fairly large nine-figure industrials, like manufacturing companies, everything from bakeries to, I think, large restaurants, large restaurant groups, et cetera.

42:39And that guy is in his 50s, I think. I hope he doesn't kill me if I got that wrong. And he just shows up. So he's done like lumber mills, et cetera. He just shows up and turns the operation around within six to 12 months, absolute machine. And his book gives you, it's probably the most value in a book that I've read in a really long time. It's just like tip after tip after tip. And you can just take it and apply it. Even if your company is not distressed, it'll just juice profitability, if that makes sense. Really awesome. The guy's just a complete machine. I'm convinced he could drop them into anything and he'll just make it more profitable in six months.

43:12And that's because what? What is he like world-class at doing? What does he do when you drop them in? I'd say he's just very fast at making decisions. He doesn't hold back. In a lot of ways, running a turnaround is like running a startup. You don't really have the benefit of sitting around to make decisions. right? Like you're not going to hire McKinsey to run a full-blown study to see if you should do something. You're just going to go and do it, right? And maybe you have some light directional data, but you're not going to wait for a ton of data. You're not going to run some crazy Qualtrics survey, right?

43:39You're just going to go out and get it done. And that's what he's really good at, is just taking action. He'll show up. For example, when he turned around that Canadian lumber mill, he's American. So he just, he moved and, you know, keep in mind, he has kids, etc. But he still just moved, showed up to a lumber mill in the middle of nowhere, Canada, and turned it around. He's got it done. No one else will really do that, right? And there's a premium for that. What part of this brings you joy? Why are you doing this other than that it makes you a lot of money? I'd just say it's really satisfying and it's fairly repeatable.

44:09So, and I think the speed at which you learn is really, really good, right? And it doesn't require a lot of equity to keep scaling, if that makes sense. So for example, you can probably buy a relatively distressed brand doing 100 million for maybe 10 to 15 million in equity. I, we had, we're friends with Moyes and Suli Ali. So Moyes started native deodorant. And I was like, Moyes, we're in San Francisco. Why are you selling deodorant? Why not like do software and be normal and make more money? And he goes, I'm a merchant, man. I'm a retailer. Like this is just, it's in my DNA. Like I just, I make products and I figure out how to make it.

44:46I'm a merchant. That's what he said. I've been working on these t-shirts. I've been working with the t-shirt designer to do things. And now I'm just on the lookout for these quotables. I'm a merchant. That's what he said. he goes he goes i'm a merchant what's that say it says carter cove and then uh this is a banana that says ir like internal rate of return that's so funny well and moise also said he goes my second frame or he goes uh my first favorite phrase in the english dictionary distressed asset uh and it was funny but he goes he goes i'm a merchant man like i and it says i don't know if it's like a like an immigrant thing or what it is but like his because i know their their family also owns homes like lots of single-family homes that they rent out and they own gas stations and a lot of my indian friends the pakistani friends all do that they have uh gas stations things like that and i'm like i don't know man maybe it's just something in the culture where you just like you're just geared towards small business but uh yeah and like for you is it the product that you like or is it just like i just like making stuff something that provides value and i just like optimizing it for profit i mean what do you think is driving you towards this um yeah it's in distress side it's really interesting because it's like a game of chess with the existing creditors, existing cap table and kind of figuring out how to squish it together to make it work.

45:58Right. So maybe you have like really angry senior lender and just convincing them like, hey, you know, give me the position at a decent price. I'll come in, I'll turn it around and eventually you'll get right side up, or at least you'll make more than you would just liquidating these guys and then convincing the guys that you're getting the company from because they're often really upset. Right. Like say companies doing 20 or 30 million, it's still run by the original founders in most cases, and they'll be really emotional about it, rightfully so, right? So kind of figuring that side out is really, really interesting.

46:23Then obviously the operating end, I don't like it as much as my co-founder. He really loves the operating end. But that can be a lot of fun too, just coming in, getting rid of the bad apples very quickly, and then building out a team and kind of revising the culture. There's a story of, what's the famous hedge fund guy who's probably in his 90s now, but you guys will know him. Carl Icahn? Yeah, Carl Icahn. He tells this story on YouTube. And he's like, I bought this company. And it was not doing great. But I thought it could do great. And so we owned like 12 floors in this one particular building.

46:59And I just went from in one hour from floor to floor to floor. And I laid off the entire floor. And he tells this story laughing. He was like, it was the greatest thing ever. and the audience was like why you know you're ruining jobs and he's like but i'm making it better like we're gonna we're gonna have a better outcome and like i go both ways with that i'm like well you're kind of just you know um like these hedge fund guys i'm like you're just like an excel monkey and you're just like squeezing every juicy can you're not providing a lot of value but i do understand the satisfaction of just like getting something that's not fulfilling potential and achieving potential you know it's exactly you know what story i'm talking about where you're like yeah i know the exact one what's the same video did i get it wrong no you nailed it you Yeah, he goes through floor by floor, and he does exactly what you said.

47:41And he's glowing with pride. I'm like, Carl, you're just ruining these people's lives. Carl, you're blushing.

47:51Layoffs just get him hot and bothered. Yeah, he's like, I'm getting a semi just laying these people off. But yeah, I guess you're kind of in that position. A little bit. I guess it really depends on the company, right? In a lot of cases, you have a few really good apples. People left who are really passionate about the company. They want to see it succeed. And then the last people left. And then you have all these people who are more or less just leeching off of the corpse, right? What do you think about how Elon's done this with Twitter? I think it's great. I think a lot of those people are really self-entitled and they have no perspective on anything.

48:23In a lot of ways, they're kind of like the modern version of those companies in the 1980s that were really fat and just overpaying executives, etc. I don't really feel bad for someone who's making up$100 ,000 losing their job, right? it's more so people working blue collar jobs where they're making 40 60 grand and they're working their ass off um i definitely don't feel bad for any software engineer making 300 grand who's upset they have to work 10 hours instead of six i don't disagree with you i just wish you would be less of an asshole when he was doing it you know yeah yeah that was kind of pointless like i think he made fun of someone who's disabled or something that's obviously horrible it's inappropriate and you mentioned something about uh being in america and how like you know you like things that are in America.

49:02When I, does it ever give you, like, do you have any sense of pride around like creating American jobs? Because I know on your website, you said we've created or saved 200 different jobs in America, let alone overseas. Are you into like that whole made in America thing for like the sense of pride thing? Or is it strictly like this just, if it makes sense, it makes dollars? Yeah, I think it's a mix of both. I think it really does make sense. And I'm Canadian, but I'm obviously grateful for the opportunity that exists in the US. You know, Americans just much more gung ho about entrepreneurship. They're more willing to write a check and just get involved than Canadians are.

49:36If you go to Vancouver, where I'm from, it's a lot of older real estate families. They're not really willing to write a check and get into something the way Americans are. They love taking risk. And I really appreciate that about the U.S. Yeah, man. There's a thing I've noticed recently about what I call like the North Star formula for a business. And so I like when you can boil down a plan into like a very simple equation. So let me give you an example. Like Sam with Hampton. I think I texted you this, but I just said 10 ,000 times 10 ,000. So you just need 10 ,000 CEOs who are going to pay you$10 ,000 a year and you have$100 million business.

50:1910 ,000 times 10 ,000. So it's like, can I provide enough value where somebody is willing to pay 10 grand a year? Um, and then can I get 10 ,000 people to sign up for that value? Your whole business comes down to that one equation, 10 ,000 times 10 ,000. Um, when I met, uh, when we were hanging out with Andrew Wilkinson, I was like, how much equity did you put into tiny originally? And, um, I think it was something like, you know, don't quote me on this, but I think it was something like$6 million. He's basically turned$6 million into like$600 million, just as round numbers. And 6 million into 600 million.

50:52If you want to be the next tiny, you can just take that thing. I'm turning six into 600. Okay, how are we going to do that? Let's work backwards from that simple formula. Well, I think I would need to compound at 45 % annually. Okay, how am I going to do that? Well, I need to buy businesses on these terms at these prices, right? So a formula can be very instructive. We have some friends that just raised$18 million, and we're all like, what do you do with that 18 million? And they go, we're just trying to figure out how we could turn – or like the goal is take this 18 million of equity. and turn it into 10 million a year of free cash flow.

51:25It's like, okay, like that's a clarifying equation. And I'm curious, Maitav, for you, like in a best case scenario, how will this have played out? So like you go to the start. I don't know, how much equity did you and your co-founder put in as like your seed capital to get your whole business off the ground? Well, it's kind of weird for Carter because we both had a few exits beforehand. Like he'd sold a company that he got to kind of low eight figures in his early 20s. He put a bit of cash, but we put in, I want to say a couple hundred grand, like two, 300 grand to start making investments. And so, and maybe you've put in more over time.

52:01I'm not sure, but like whatever that's. We reinvest everything more or less. Yeah. But like just the out of pocket, like initial, not reinvestments from the proceeds of what you've been doing, but just have you had to take something out of the checking account or savings account just to recapitalize the business in any way? Or no, it was like two, 300 grand. And then anything else we put in was reinvestments from what that$200 ,000 or$300 ,000 has made us. It was reinvestments from what that$200 ,000,$300 ,000 that we put in initially was. Okay, amazing. So you're going to go from, let's say,$300 ,000.

52:30And if this all plays out the way you want, fast forward, I don't know, 10 years or however long you plan to do this, what would be the big win for you? How much would the portfolio be worth for this to be a home run outcome for you guys? Yeah, we are really goal-driven. We're a little bit weird that way. But we both want to tackle increasingly large distress deals. That's what we get pleasure from, I guess. Just kind of fun doing it. And we'll just keep doing it until we don't have fun. So our goal really is get this floral company thing can usually get to$100 million in top line. Like our allowable customer acquisition costs will go up by 30%, 40 % once we finish with a few manufacturing transitions.

53:09Hold on. So you don't have, you're not goal-driven? What does that mean? I don't even, that's like not English to me. How do you function without goals? I just like to do hood rat stuff. Just whatever's fun, right? Dude, you're like the dominatrix of PE. You just get pleasure. You get pleasure. Like, oh, yeah, you like that? Ebena. Ooh. That's going on. That's my new LinkedIn subheader. You just love the act, man. You just like the act of, you know, someone, you whisper IRR into your ears. You're going to get weak at the knees. well it's just fun because you get to learn from people like like you too or hang out with other people that are really interesting um and then that's really exciting too right but don't you don't you don't you have um like a like a you know a lot of people who get in business they've like one day i want to make all this money so i can buy you know a thousand acres or i want to create a school that does this or i want to be able to make sure that everyone in my family never has a dream medical bill a dream instead of a goal my initial dream my initial dream and my co-founders, this before we met, it just turned out we had like the same target was to make like$5 ,000 a month.

54:21That was it. That's how it starts, man. That's how it starts. And then you realize that, then you realize that, you know, what I've noticed, I have all the same goals. Hold on, hold on. I don't believe this. Dude, you didn't start like this. I had the same thing and the goals always change. But you said when you started, you guys have had wins under your belt. No, no. I mean, before that, like, oh, okay, okay. Like early on, like when I did my first thing, I was like, I'm going to be stoked Okay, yeah, of course, of course, of course. But what about now? You know, like what's like the vision, the long-term vision that kind of keeps you excited?

54:54Maybe sometimes it's buying shit, giving shit away, helping your family, whatever. Right, I think getting this one portfolio company to the next level, either selling it or releveraging it, taking out cash, and then raising a large fund is probably like our immediate short-term goal in the next two, three years. Dude, that's so not what I thought it was going to be. Sorry, go ahead. When I was in college, one semester, me and my buddy Trevor and our other friend Dan, we had read the card counting book. This was before the movie came out, 21. But the book Bringing Down the House was out. And we were like, oh, not only are we going to count cards, we decided to create an underground blackjack club on campus.

55:35And so we started preparing. And because we had read this card counting book, instead of just doing the obvious thing of being like, cool, let's just invite some friends over to play blackjack at low stakes. Let's see how it goes and we'll go from there. That's how you would do it if you had any ounce of IQ in your brain. Instead, we were like, okay, let's go buy this fancy blackjack table. Okay, cool. Now we're in the hole and we've got this fancy thing. And then let's run all these practice simulations to see how bad we could get beat. And then what if somebody comes and count cards? What's our security going to be?

56:08We were worried about all this stuff that didn't matter. And we spent, no joke, We spent like the entire semester at college, which is like that semester cost each of us probably like 40 grand just to be there. And instead of focusing on the 40 grand that we put into being there, we were doing this thing. And I remember one night we were calculating. We were like, oh, my God, if we do this, we could make$3 ,000. And then we all started giggling like, oh, can you imagine that? Like we were like, dude, what if we made$3 ,000? And we just like, that's$1 ,000 each. and we were so pumped about this.

56:44And it was like, it just took over our mind, like a mind virus for three or four months. It made no sense, but it was like, you know, it was the humble beginnings of scheming. It was like, it was the first of many schemes to come with this same group of people. We ended up starting a company together and did many more things together. But like that first taste of the scheme and how hilariously bad your plan and your goals are, like now when I look back, I look back with a lot of fondness on that. Totally. Yeah, it makes sense. It always starts small. And then you bought the safe to keep the cash before you even had the cash, and the cash never even came.

57:22Yeah, we never even ran the club because we were too worried about getting kicked out of school because we found out how illegal it was. Well, basically, we had one simulation where I was the... Again, we were big into these simulations, and I walked in and I played. I lost$100. And then I go, give me all the money or I'm going to tell people about this club. And I was like, oh yeah, what are we going to do if somebody does that? Like at any point in time, somebody could just literally take all the money because there's no recourse. What are we going to do? Call the cops and tell them that somebody stole from our illegal gambling club.

57:57And we were like, oh, this won't work. Before I sold my first company, I was using some type of like mint.com style service. And there was like a thing where you could manually, you know, you connect all your accounts and it shows you your net worth and whatever. And they had this option where you could manually add something. So I manually added this really big number. And I would log into this every day, like six months in advance. And I'm like, sick, this is awesome. And I remember, like, when the money then actually came in, I was like, damn, I kind of like felt most of that joy in that six months leading up just like, I kind of tricked myself into already believing this was real the the simulation kind of gave me like a lot of the joy uh it's pretty cool you can kind of like trick yourself into believing these things are true and you get a significant amount of satisfaction from that fake thing compared to the real thing yeah you you because what people want is the feeling you don't want the thing if you ever say oh i really want x to happen why do you want x if you if you just keep asking why do you want that the the obvious answer why you want anything, a relationship, money, whatever it is to have a six pack, whatever.

59:04It's some feeling. It's a sense of accomplishment. It's a feeling of relief of real, of less anxiety, less stress, whatever it is. And then you realize, Oh, it's not the thing I want. It's the feeling. And then you might be able to get the feeling through literally like faking it. You might be able to get the feeling through something much simpler. That's not going to take you, you know, seven years and a bunch of heartache to get there. And, uh, and also if you've never had that feeling before, even when, when that thing happens, it'll be your first time having that feeling and you'll suck at it, which is why a bunch of people feel after they get success, they get like kind of let down because the feeling wasn't as great as they, they wanted it to be.

59:41The anticipation was better than the result. And the reason isn't because the feeling is actually a letdown. It's because it's the first time they've let themselves try that feeling and the muscles just very, very weak. And so, uh, yeah, big, big life tip is to realize like what you want is the feeling and then start practice having that on a daily basis through like much smaller things. Yeah, it works. Um, may tab you, I'm looking at you on Twitter, you have 5 ,000 followers. I think that being popular on social media, it doesn't really matter in most all of business. In fact, sometimes it's like negatively correlated to how popular you are.

1:00:14But in your case, I, at least I know with Andrew, like when he's buying a lot of companies, having some, um, like, you know, it's basically being on Twitter is a billboard for him. So when he reaches out someone they're like oh you know i think i've heard of you fine let's have a conversation for how good it seems like you're doing and how smart you are your um your social presence is significantly smaller is there a reason uh for that no i just don't really like it um i just like to post content about stuff that i actually care about um and i'm fairly open and then i guess too on the distress side when you're buying a business they're more of a forced seller right um and when you're talking to a lot of these senior lenders who you're working with it's a lot of guys that are in their 50s or 60s and they're very conservative traditional um like banker types right they're not they don't really care about social media or anything like that so i'm sure it does help with deal flow on the growth equity side or buying healthy businesses but um i've just never really been into it yeah i mean you have you have you do tweet interesting stuff it looks like what's a daniel roth watch it looks like a pretty fancy fancy watch that you're just a nerd about like neo vintage and vintage watches and then as well as some newer brands but mostly smaller ones.

1:01:23It's just kind of, a lot of it's like angel investing. Like if you buy into an early independent brand, which is just like a watchmaker basically going at it, sometimes they can appreciate in value significantly and you get a pretty cool watch for the money. Plus you support a small business. They'll build you whatever you want. So it's like a win-win. Yeah, your social media is actually pretty cool. I'm going to follow you, but you have some interesting stuff. But like compared to some of the stuff you're doing, I know a whole lot of people in the DTC space that are significantly bigger than you and are much more of a little pipsqueak and don't ever walk the walk like you are.

1:01:58You know what I'm saying? Yeah, yeah, I know what you mean. Leave us with this example of this Weight Watchers thing. So explain what happened with Weight Watchers, then we'll wrap it up. It's a super high level Weight Watchers was not doing so well. And this guy at this tiny firm, not super small, but relatively small, he convinced Oprah to join them and they absolutely crush it. That's the very high-level overview of what he did. So this guy, what were the numbers? So what did they buy it for roughly? I'd have to go pull it up. And then what is it going to happen? I'd have to pull it up. Okay.

1:02:30So how did this guy know Oprah, by the way? That sounds like, you know, oh, it's simple. He got Oprah on board. That doesn't sound that easy. Yeah, 2015 Oprah was a big deal. That's peak Oprah. That's like 2012 Obama. Yeah, that's peak Oprah. So in 2015, he did a deal with Winfrey to acquire a 10 % stake in Weight Watchers. Since then, the company stock has soared by almost 600%. They sold$1 billion of Weight Watchers stock, and Oprah gained at least$400 million so far. Okay, that's pretty impressive. It will go down as one of the best private equity deals ever. Over the 19 years, they put$226 million in to Weight Watchers and got$5.37 billion out,$4.7 billion of realized profits.

1:03:15yeah that's pretty good uh that's pretty good not including the stock that they still at that scale but they only bought 10 of it uh um i thought they bought more i think they kept buying more over time i thought they kept deploying more and more cash into it dude we have to do a pod on oprah like i i love her i grew up watching her and like i i for you know she's 70 now i just looked her up or she's 68 or something uh we forget or i forget like how big of a baller she is i'm like just googling it's like oprah buys another thousand acres in hawaii came from nothing and she bootstrapped like she basically you know got got her net worth to be something absolutely insane yeah what's her what's her story so uh what what do we know about the beginning of her story uh born in a really poor town abused growing up etc and then absolutely crushes it and she should run for president i would totally i think she i think she was born in like an abusive family and like i think i think there was even like she got like pregnant at 14 or something yeah and i think that there was some like sexual assault or something some some like some horrible tragic stuff and then at age 24 i think she becomes like a weather woman or like a like a whatever they call it where you're a news person but you're not actually in the office you're like out on the street yeah um she did that and then eventually when she's like 32 or 33 she gets a talk show but it's not like a hit right off the bat but it slowly starts picking up and then eventually she like makes some like groundbreaking deal she did like one of these groundbreaking deals sort of like michael jordan did with nike uh what lucas films did with star wars where it's like you know we'll just take a percentage of the upside and uh and then that like turned out to be like one of the most you know one of the best deals of all time and and it's worked out and you know she did this all back when people were very very racist it's all like now yeah like i think it was out of Nashville, Tennessee, that she's doing this, so in the South, and she kind of killed her.

1:05:10We need a How to Take Over the World episode on Oprah. What's going on? Where is our definitive Oprah episode? Why have you not done this already?

1:05:21It's a real question for you, Ben. Put it on the list, Sean. Put it on the list? Put it at the top of the list. Let's do this after this episode is done. You got it. I'm buying my Oprah. I'm on Amazon.com buying Oprah biography. Is there an Oprah biography? I would totally buy that. Of course there is. There has to be. I mean, she's the best. I'm a big fan of her. And she did this all out of Chicago. So I think she still owns the penthouse and the Sears Tower, which is one of the largest buildings in the world. But no, she's the best. You know, I always forget about this. It's like I'm in Austin, and there's all these nerds talking about crystals.

1:05:53You go to a therapist, and they recommend a crystal. There's pretty woo-woo shit out here. She was pretty woo-woo, but for some reason, she made it very, very likable. Like, you guys remember that book, The Secret, where it's just like, it's like, if you think about it enough and like put it in place in your brain. The universe will grant you this. And like, she like would, she was talking about that stuff before any of that stuff was even popular. And for some reason, when she does it, it's very tasteful. Other times, my friends do it. It looks like, you know, they're one of those women wearing like a Coachella brown hat.

1:06:28Like, you know, and it's not cool at all. You know, I'm talking about those wide rib hats. when I ever see one of those with turquoise jewelry, I run away. I'm out. Good choice. You know, if you're wearing cowboy boots, turquoise jewelry. If I see turquoise, I'm out. Yeah. No vibrant hats for me. I'm out. If you wear one of those things, I'm not part of this. But for some reason, when she does it, I'm in. Well, that's what I want to know. Like, I think the story I've heard is like, grew up in these terrible conditions, overcame and became super successful. but I literally want to know, like, what was the successful part?

1:07:03Like, meaning how did she get her break? And then like, what led her, what was she doing? Was it literally just better content? Like, was she just that damn good and dynamic as a talk show host? Was it like the Microsoft IBM deal, where they like, you know, how did Microsoft take over the world? It's like, well, they cut this really great deal for the operating system where they could be, you know, with multiple providers at once. And then they use IBM to bootstrap and that's how they got bigger. Like, it's like, was there like a growth hack? Was there a, um, a smart, you know, deal that she struck?

1:07:33Was it, uh, the timing? Cause like, you know, those shows, you know, cable started spreading into every home in the country. And like, she was one of the top three shows and just like, she got to surf the cable wave or whatever. Like, I want to know what actually led her to the mega, mega fame. Uh, what were the actual, those, those things, which is not like a simple answer, but, um, That's what I'm actually curious about because you could – like in the topics that I know about, those stories are always the most interesting. And I feel like when you – when I go into other topics, like I was like, oh, Maytab, like what happened?

1:08:09He was like, oh, started off bad. Now the best. It's like, yeah, but act two, the middle part, that's the part – anybody who actually wants to make shit happen in their life, you want to focus on act two. like Hollywood focuses on act one and three right like the the bad origin and then the the happy ending but it's the montage the training montage when like you go from like scrawny to strong the training montage that they speed up through is the part where all the interesting shit happens I already told you Gino I go Billy the week on Wednesday Oprah I'm on it yeah there's this really cool book um called messy middle have you guys read messy middle it's by uh what's the uh Scott the most dreamy guy of all dreamy guys scott belski is the man scott belski basically started um there's a guy named scott belski he started behance which is uh where developer designers could host their portfolio he started it bootstrapped it had 175 million dollar exit before it became very successful he said he had like 50 000 and he invested like 15 000 into pinterest at a 3 million valuation 15 000 into uber at a 3 million dollar valuation each of those 50 to 100 million dollar outcome.

1:09:20Plus, he owned 75 % of his company when it sold for$175 million. So very, very, very successful. Now, it's looking like he's going to become the next CEO of Adobe. So huge deal. He's got this awesome book called The Messy Middle. And it talks about how starting things can be somewhat easy. But once you start that, then there's... Once you start it, and there's the middle, and you have the end, and the end's the easy part. Things are just kind of working but the messy middle is that 10 year period where it's like is this working is this not working it's a really cool book on how to like navigate that period and it's and i love that title the messy middle yeah great title great guy he came on the pod once a long time ago we should bring him back um but yeah he's on your like mount rushmore of dreamy dudes i feel like you got huberman up there you got belski who else it's basically like men with strong good looking jawlines yeah yeah you need a good jawline and a clear-cut jaw dude have you seen scott belski's jaw man he's got a strong i know what i'm googling talk about i'm talking about not a distressed asset yeah that's a blue chip stock right there yeah he also just dresses well and i feel like dressing well is this like really easy thing to do that nobody does and uh he does an amazing job of it especially in tech i know he's he he's the man because he lives in new york dude all those guys are stylish he lives in new york yeah so he's got that leg up um dude i've never been to his house but i've been to his house i know exactly what a guy like that's house looks like it's basically I can picture it so clearly in my mind of how immaculate the design is of that guy's house.

1:11:07He invested in the hustle. He wrote us a very small check and I got the paperwork for where to send the docs to. Immediately I looked up and I saw the house and I could tell you off air it's exactly what you're describing. You didn't even describe it other than use some big words and it's exactly what you're describing. I tried to you in 2018 when we were hunting for deal flow i stumbled across the hustle like this is awesome i should try to invest in this so i messaged you on facebook but no reply so oh i'm sorry you should go pull it up it's just kind of funny this is your revenge no i'm sorry it's kind of funny if i would have got that would have been a good investment but it would it would have i'm sorry you and maybe you would have known scott you know i could have helped you connect with my boyfriend Scott.

1:11:53Maybe you too could have Zillow'd Scott's house. Wow, this is awesome. We're friendly. We're not friends, but I've Googled his house. He's not Googled mine. Yeah, I can tell you what type of couch he has, though. But dude, thanks for coming on, man. No, thank you. It was fun. You're awesome. I'm going to go and find that. I just pulled up Facebook. I'm going to find that message. It's just kind of funny. It's from 2018. It's like, hey, I'm an angel investor. Please let me invest. I like what you're doing. Does your last name start with a B? Yeah, Bogle. If you just type in B-H-O-G-A-L. Oh, yeah.

1:12:29I see it. Sorry about that. Good deal flow. Would have been there. Should have messaged you more. Should have ever asked you. Dude, I saw a post on Reddit yesterday. It was a map. I don't know if this might be fake news, but it was on the top. It was one of the most popular posts on Reddit yesterday. It's a heat map that shows the average life expectancy by town and there's literally a 20 year age difference between like new york uh california versus like the south um it's like you know people in the south are dying at like 60 something and people on the coast who are living like you know sort of the yoga and salads lifestyle are living till they're 80 on average and then you can see these small pockets like in florida it's like the retirement community where people like migrate into yeah like they're New Yorkers.

1:13:19They're also living for a long time. Yeah, the Jewish New Yorkers have moved down there. They're living for a long time. Everything around it is surrounded by the walking dead of people who are going to die at 60-something. And there's like, it's like Boca Raton kills it. And then like, Jort Lauderdale is like, has a 30-year shorter life expectancy. I asked my data guy, I said, please overlay a map of Chick-fil-A's. And it was a perfect sequence to like, to the dying early crowd, which is unfortunate for me because I love Chick-fil-A. chick-fil-a is not healthy well we're screwed um dude thanks for doing this we appreciate you yeah no worries thank you

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