Bootstrapping a +$1B Business + Selling To The Ultra Rich | Jesse Pujji

20:50It's huge. It's a ridiculous business, right? And so I'm sitting there, I'm an entrepreneurial person. and my boss comes up to me and she goes, you got to set up first rain, Jesse. And I'm like, oh, cool, cool. What's first rain? And I'm like, looking through it. And it's like, pull the stock ticker and get an alert to your inbox when there's news about this company. And I'm like, this is just Google Alerts. She's like, what's Google Alerts? And I'm like, what do we pay a month for this? She's like, oh, we pay like$2 ,000 per license. And I'm like, well, our group is like 40 people. Like we're paying$80 ,000.

21:22No, no, we got a discount. It's$50 ,000 a month. we're paying for this Google Analytics thing. I'm like, what the fuck? And so one of the categories for us now, and again, remember unfair advantage is very important. I happen to have lots of friends in this world because of where I went to college. Just whatever, unfair advantage. Where'd you go to college? I went to Penn. Fancy. The Wall Street training school. So a bunch of my friends work at Hedge Funds of Private Equity. And these guys want information. They're willing to pay tons and tons of money for an ingredient. They're not price sensitive at all.

21:56They can ROI of every decision they make, because that was what we got told about first reign. They go, oh, it's$50 ,000 a month. But if it gets us one trade ahead of somebody else, it's paid for itself for the full year. So because of the numbers they're dealing in, they can just pay anything, right? Just like the$200 ,000 to diligence the project for a half a billion dollar deal, it's nothing for them, right? So this category is a great one to sell into. And actually, I have another funny story you guys will like. So on GLG, GLG has been like my life, my savior in business. What happened for me, I became like a regular, take that term any way you want, for hedge fund dudes for Facebook.

22:33Every quarter, 10 same people would call me and they would go, how's the quarter going, Jesse? Do you think spend is going to be up or down? Because they own huge positions in Facebook. Right? So one of the guys eventually is like, Jesse, I want access to your data. Like, I just want the aggregate. I'm allowed to share it. It's my data at Ampush. I'm spending hundreds of millions of dollars a year. And he goes, I want just full real-time access to your data. I go, I can give it to you in aggregate. I can't give you any client data. And he's like, but what can I get to you? And I was like, well, bootstrap company, right?

23:00I'm like, you know, we've been dealing with this like working capital situation with our bank. Like, will you just give me a$5 million interest-free loan? He's like, done. He's like, done. So this guy, Peter, he's a good friend of mine now. He gave us a$5 million loan. So we didn't have to pay any interest to our bank to do working capital. And all I had to do was basically give them a real-time feed from our Tableau or whatever, our aggregate, CPM, CTR, whatever, all of our data for Facebook. So anyway, First Rain is a basic software tool you sell to hedge funds because they're willing to pay anything for it.

23:32And so one of my ideas, by the way, and if anyone's listening and wants to build this with me, I need someone very good at analytics and decent at sales, is just with my network, I could probably get$5 billion in meta Facebook spend and give people a survey every quarter. Did you spend more or less? How excited are you? Like a detailed survey. It'd have to be a really robust survey. Then I'd go to all these hedge fund people and I'd say, you can have access to this data every quarter. It's$50 ,000 a quarter. And you have to guarantee me two years of a subscription. And I think I'd have people align out the door of people willing to pay for that data.

24:08And then I would do it for Google. Then I would do it for Amazon. Then I would do it for all of these different platforms. Dude, even easier. Why not just go to Triple Whale, who already has all the data, and be like, hey, Triple Whale, let's do this line of business, basically. 100%. Yeah, let me license your data for the exclusive use in the financial service because that's not going to be important for them. And then you can basically create a thing that hedge funds would pay for. And the best thing, what I would do to hedge funds, I'd say, I'm only going to sell it to 20 of you, but let's do a reverse auction.

24:36So now make them bid against each other for this data. And as long as you limit it, they'll do that because they don't want everyone having the data, right? That's a really important thing to them. But anyway, the lesson here is that category, where alternative assets are a great thing to bootstrap into because one deal basically can make you as a business, and then you can go from there. Yeah, my old business partner used to call it just adding a zero. He's like, basically, what market or product can we go into where we do the same exact work, but we just add a zero to the end of the dollar amount that we're able to charge?

25:07Sam, you told me this with your events too. You used to charge, I think, like$300 a ticket, but then other people charged$3 ,000, and then I forgot who it was, like Recode or whoever it was, charged$30 ,000 a ticket. And it was like the same work, same product. It was ridiculous. And I did the exact same thing, Sean, that you said you did where you're like, I have an idea, but I'm broke. So I'm just going to assume that everyone else is broke. That's what I did. I'm going to go hang out with other broke people. Yeah. It was like the easy thing, which like the two takeaways from this, by the way, are sell to the rich.

25:36You know, you're going to be able to add a zero to what you're doing. And then your way of figuring out what they need was you had friends in that circle. You can go make friends or you were using GLG, you were like, I have one area of expertise that could be my calling card to get in the door. And then that will be how I, you know, understand what these people need. And then maybe I can pair what I know with what they need and to a, you know, either a data product or a consulting product. Yeah. And to tie it, to tie them together, actually, if anyone listening, I would say, what is it that you know extremely well are a couple things that are cross sections of each other.

26:08And so first figure that out and then figure out who's willing to pay you the most money for what you know. That's essentially what I did with, with Ox Business. I was like, I know this thing, who's going to go pay me the most for it? And that group is going to pay me the most by far. Can I, you didn't put on this sheet, but I want to talk, I want to ask you a couple of questions about this, particularly because I don't know if Sean knows much about this company and I know a little bit about it, but I know that what I know, they're like crazy impressive. So I think you sold your company to Red Ventures.

26:33Is that right? So we saw it's a longer story. We sold a minority. They wanted to buy the whole thing. We couldn't get to terms. We sold a minority. We gave them an option to buy the rest of the business. They started buying content assets and decided not to buy the rest of our business. So we ended up eventually selling it to someone else. But we did for basically... But you got to know them. For two years, we operated as one company because the plan was originally for them to buy it. So I know them and Rick incredibly well. Do you know about this company, Sean, Red Ventures? I know about the surface level.

26:59And actually, we've hit up Jesse being like, dude, this is fascinating. Should we get Rick on? And I want to know more. Well, but there's one part of the story that I just want to mention, which was amazing. He started this thing, and then he was actually on the plane that Sully landed in the Hudson. And he gave this amazing talk when he was like, I was like one or two years into my business. And for some reason, that life or death situation kind of changed his outlook on life. And now Red Ventures is known as one of the best places to work. And it sounds like it's a great company. So yeah, what's the background?

27:33Yeah, so the story, the way that they tell it, they started the business in 2000. So Rick and Dan are the founders and they're both friends. and both multi-billionaires. And they actually met Ascendant in the late 90s. You guys know what Ascendant is? They had the coupon book. They launched Orbitz. They were like the original internet holdco. They met there, very direct marketing heavy. So in 2000, the two of them broke off on their own. Literally months before the internet imploded, they started Red F is what it was first called. Five years later, in their story, their telling of it, not mine, Rick says, Dan, give me a dollar.

28:06Dan gives him a dollar. He goes, you can have my half of the business. I hate this business. I don't want to do it. So they do a hard reset. Five years in, I think they barely were doing a million EBITDA. And these guys are the best learners you've ever met. So then at the time, go back to 2005, there was this new thing called Google AdWords. And there was agencies starting, and there were lead gen businesses. And they, for whatever reason, had a relationship with DirecTV. They said, hey, DirecTV, if you remember back then, was looking for satellite people to sell in the mall. Like these resellers.

28:35So Rick, or one of them, had this idea of, let's go to go to direct TV and become a dealer. So they go, Hey, direct, you want to be a dealer? I go, sure. We love dealers. What's your territory. They go, Oh, this new thing called the internet will be our territory. They go, okay, sure. We don't know anything. So they became direct star TV authorized dealer of direct TV. But as a part of their thing, they owned all the web rights. They own all the AdWords rights. They own all the SEO. And in four years, they built a$75 million EBITDA business, just selling DirecTV subscriptions because they would run the media, take the phone calls, and all these things that are commonplace today where like what you do on your website gets cookied and then you know on the phone call, they were pioneers in all of that stuff.

29:17And basically, if someone became a reseller of the TV tech dish network or wherever it was, DirecTV, they gave Red Ventures like$1 ,000. They get$500 bounty for every single customer they get and Red Ventures just had to do it for less than that, right? And so between their media, and of course, after a few years, DirecTV is like, Like, well, we can't get rid of you because you're driving all of our customers, but we don't like the deal we made. So then they renegotiated a million different times and they still probably work with them. But then they went and took that out. And then General Atlantic, the big private equity firm, invested and has crushed it on that deal.

29:48And they went and did that for any high LTV purchase you can imagine. So every credit card company worked with them. American Express, Verizon Wireless, people who sell pest control. Like anything that was like a long-term purchase, basically Red Ventures was either running their marketing. And when they invested in us, we want to do the same deal for direct-to-consumer companies, which did not work nearly as well as it worked for them, which is a different story for a different day. But that's what they got to. Then they got to 2015. They're doing two, three hundred in EBITDA. And there's no more growth left, which is why they invested in us.

30:20And they bought, they did, they did a bunch of other things. Rick's really smart. And he goes, okay, I'm going to invest in Jesse. He did five other deals at the same time, same year. And a year later, Ampush is going, okay, one went down to zero one you know but they bought an SEO business that they use their same playbook and within nine months they took it from three in EBITDA to nine in EBITDA and they go oh shit so that worked okay let's go do a bigger deal so then they bought like a$10 million EBITDA SEO content business and they took it to like 25 when you say SEO content business you're talking about like the points guy yeah the first one was reviews.com the second one I'm forgetting the name of it but yeah like the points then they finally like they did a couple of those and Rick's like, all right, I'm ready for the big time.

31:01He went and bought Bankrate, which is a billion-dollar publicly traded company for 100 in EBITDA. It owns the Points Guy. It owns creditcards.com. It owns. And in less than two years, they tripled the EBITDA of the business. And then they bought Healthline. They bought CNET. I mean, so they basically took their, and now the services part of their business is a tiny part of their business. And the SEO content part is a massive part of their business, but the same culture, the same playbook. And it's an incredible business. So can you explain what they're doing? So they buy these SEO businesses, which is let's just take bank rate as an example.

31:31People Google best mortgage rate, more current mortgage rates, whatever. And they bank rate has done the content work and the SEO work to be the top thing that shows up on Google. So then you click it, you go in and they have like these affiliate offers and that's all great. And what Red did was they basically, am I right that they bought a business that was like primarily SEO driven and then they layered on paid to that? Is that the main thing that they did or what did they do to the assets? there's four major levers they pull and the first thing i have to tell whenever i tell this story is rick and it's the most unique culture like at some point you guys i just take you there and you got to tour the campus and check it out because you've never seen anything like it and there's a great new york time article where they describe it as like part wall street trading desk part like southern politeness and part like hard-nosed direct response marketing and that's exactly it's a very apt description but anyway well and that's why i wanted to ask you about it because rick seems like an anomaly like he seems like a like a like This could be a shady industry.

32:32It often is a shady industry. He doesn't seem like a shady guy. And it seems like people love working there, which is rare. He's one of the most special people I've ever met. He's one of the most special people in the world, I think. What would we notice if we toured the campus? What would we see? It's funny you ask that. So one of my requests to him when they invest, I want to shadow your leadership team for a week. Me and my 10 leaders are going to shadow your leaders. And I want to see what you guys do. And what you'd find is, these things that are like startup adages, they've done at a scale of 5 ,000 people.

33:00Every meeting is short. Every meeting starts with a bottom line. Numbers are the only thing that is ever talked about in levers. And every person is basically trying to optimize more EBITDA in any discussion they're having. And they don't talk about the work that gets done as independent of that. Right? It's like another example is like they shape teams. So, you know, for digital marketers, they don't say like, we have a client team and we have a marketing team. We have, they go, we have like team click-through rate and we have team conversion rate and we have team traffic volume. Like they literally organize people by the KPI that they're trying to drive so that there's a deep, deep focus into it.

33:34They have these really cool things called business reviews where basically Rick and the leadership team sits and you have 20 minutes to come in, give an update on your business. Real decisions are made about the business. And he does like 40 of the or like 40 over two days, basically. So it's a high energy, very smart. It's like it's a very unique culture. But anyway, so the culture is a starting point by far because without it, I don't think any of this works. They have four main levers. The first is improvement of traffic acquisition. both paid and organic. So to your point, Sean, they'll layer on paid in a really smart way.

34:03They think a lot about cost per visitor and revenue per visitor and get that equation working extremely well. But they'll do a lot of SEO as well and they'll get volume up, right? So I think I remember high level when they bought the points guy, I'm making these numbers up, but it was doing 70 cents in revenue per visit and maybe 40 cents in cost per visit. And two years later, it was doing like$1.70 in revenue per visit and like 90 cents in cost per visit, but the visits were up by like a factor of two or something like that. Right. So, so first lever is traffic acquisition. Second lever is they're extremely good at onsite optimization.

34:34If you guys pull up the points guy or any of those things now, you'll say, wow, platinum American express is plugged here, but it's plugged in a smart way, but I want to click on it, but it doesn't feel too salesy. They're very good at getting basically the onsite optimization to be significantly higher. The third lever is they're incredible geniuses when it comes to pricing to the efficient frontier of a customer's curve. You guys know what I mean when I say that? You're using a lot of words, my friend. Dependently, but when you put them together that way, it was just a combination I wasn't familiar with.

35:03So when you're a credit card, so you're American Express, right? And American Express is probably worth, willing to pay$700 per credit card application. But their person on their side will pay$200 if they can, right? So the only way, if you can figure out the exact willingness to pay for an incremental customer by your customer in their business, your profits skyrocket. So they basically are, basically the simple way to say it is they're good at pricing. They can really charge more for what they get. And I'll tell you a funny story. The guy who's retired now, but he's a good friend of mine. He's a Southern dude.

35:37He's very like disarming, but then he's smart as shit. And he's like, Jesse, we were 60 days from close. We were going to close this bank rate deal. And their team told me there was a bid at auction for how you bought credit card applications and no technology could beat it. And he said, I looked at it And I said, Discover's only paying$500 for an application. And they said they're willing to pay$900. Why are we not charging them$900? He's like, well, that's how the algorithm works. He's like buying this deal. He goes, the day we closed the deal, Jesse, I threw away that algorithm. I pulled up a spreadsheet.

36:07I called all the customers. I said, what are you willing to pay? What are you willing to pay? I got them. I charged them exactly what they were willing to pay. And I got 20 % more in EBITDA overnight. Within the first month, I owned the business. And so that's the third lever they're good at. And then the fourth lever is they're not crash and burn people, but they're very thoughtful about and when they invested in Ampush, I cut the headcount under their sort of tutelage by more than half. And our revenue grew during that time. So they're very good at like truly challenging the bloat in an organization and being like, how many people do we actually need?

36:38Like one story you guys will love is one of their executives said they bought some like government owned thing. It's a really weird business that mails you all the mailers when you move. I'm forgetting the name of it right now. I hate that. So it actually was owned by the USPS. and then it got I hate that now Red Ventures owns it I go so how did you decide how to reduce the headcount he goes we took the top three managers in the company and we held a draft so we basically put everyone's name on the board and we said there's only 40 people of 80 staying now go draft your best people and again they're compassionate with obviously the people they let go it's not meant to be a negative towards them but like these organizations they're very good at leanly staffing these organizations so those are the four big levers and that's how they get the kind of results they get.

37:22That's dope. I appreciate the Red Ventures Masterclass. That's great. They're like a juggernaut that I didn't know much about in terms of how they actually operate. Your boyfriend, the guy from Silver Lake, the guy you love. Who's the guy? What's his name that you have a crush on? I should probably know his name if he's my boyfriend. Egan? What is his name? Egan? I think he's on their board. Yeah, he's on their board. GA is on their board. And I mean, look, they're all minority holders. They've never raised a dollar of primary capital. So they're, in my opinion, they're a bootstrap giant. They've taken secondary, but they've never raised primary.

37:54Their headquarters is in North Carolina or something, right? Yeah, they're in Charlotte. But again, dude, Rick is a hustler of all hustlers. It's right across the border in South Carolina because the state of South Carolina has paid for the whole thing with tax incentives. You have on here, every profitable founder should understand PE and roll-ups. What's that mean? Yeah, I think one of the biggest value creation levers if you're running a$2 to$5 million EBITDA business is a roll-up. and I'll tell the story of the company that ended up buying Ampush because it still hurts me a little bit when I tell it.

38:29So there was a business called Elite SEM. There's an SEM agency. 4 million EBITDA, same year that I think Ampush had like six or something, in 2015. We went and did this deal with Red Ventures, whatever, learned a ton, but these guys sold to a business called Mountain Gate Capital. And let's assume, I don't know what they paid, but let's assume it was on eight times EBITDA, which is a fair multiple. so they paid 32 million for the business right the founders rolled 30 % I don't know for a fact but I'm just making that up in this scenario founders roll 30 % of the value they take 20 million off the table and they roll the rest in Mountain Gate goes and buys another 6 different businesses in the 1-2 million EBITDA range now for those businesses they pay like 4-5 times EBITDA then they grow the whole thing organically right so then they go for was a math four, let's say they buy another five or six companies, they buy 10 in EBITDA, right?

39:22Total invested capitals call it 60 ballpark. But now the business is worth 15 times. Correct. And it was bought by New Mountain who bought Ampush. It was bought by New Mountain for 15 times. 15, which is 225 million EBITDA. So the founders got 20 million plus then got another bite of 40 or something like that. Plus the PE firm obviously crushed it on it. My push to founders would be like, if you understand that multiples are a function of growth, stability, and margin or defensibility, however you want to think about that. And all those things improve with scale. And so there's just what they call, the finance nerds call it multiple arbitrage, which means I can buy at a low multiple and then I can sell in a few years for a higher multiple.

40:02And I think a lot, if I'm a profitable bootstrap founder, including myself, even for growth assistant and other things, I'm like, this seems like such an obvious path to create a tremendous amount of value that's better than the venture path for so many different reasons, more apt and more just, you know, but yeah, I think, I think everyone should look at it in their space. And by the way, I think I've been approached multiple times and pitched on this and it's on my list of like creative AI meets roll up. So Jesse go, let's go buy a creative agency, redo their processes with AI, right? Then once you've figured that out, let's go buy 10 more of them.

40:36And not only will you be able to roll up and get the, all this multiple arbitrage, but you will create a much more profitable business. So I think there's a lot of strategies out there. And I would say, I think a lot you can do with private equity, without private equity, but the founders of running these businesses should be the ones leading them. And the more the founder has the strategy, the better they're going to do with the PE firm if they ever need the capital to go do it. Right. You mentioned AI. I want to ask you about that because you were early to the social networking wave. I think you were doing a social networking type of thing in the first year of Facebook.

41:05I think there's some story where Zuck called you. I called him on his cell phone and pretended to be somebody else. That was a good one. You called Zuck. Tell that story, by the way. Who did you pretend to be? So summer of 05, we're like, Facebook's, oh my God, Mark Zuckerberg, he's a year old. He's our age, right? We're like, he's our age. He's going to crush it. But he's never going to go into high school. Somebody should start a high school Facebook. And we're like, why not us? So we started the high list. I have the docs. We have these little iconography and all this stuff. We basically rebuilt the clone of Facebook.

41:35And at the beginning of the summer, we went to go buy hsfacebook.com. And some kid at Columbia, I don't even remember his name. Maybe he's listening and he can phone himself. He owns it. And he goes, well, I'll sell it to you for like$20 ,000. And we're college kids. We're like, no thanks. We'll call it the high list. And we say, peace. We build the whole product. We launch it. Literally on the eve of the launch, he calls us and he goes, Mark Zuckerberg wants to buy HS Facebook. So I'm giving you a last chance, buddy. You can get it. And I was like, oh my God, we need to... And I was like, my first question was, is he going to launch in high school?

42:05He's like, yeah, he says he is. And I'm like, no, are you sure? I think the guy's bullshitting me. So I'm like, prove it. So he forwards me the email from Zuck. And this is just a guy named Mark Zuckerberg. It's not Zuck Zuck today, right? And the guy includes a 917 area code number. Sorry, Zuck. Your area code is 917 on your cell phone. And I don't know what the rest of it was. I don't remember. But basically, it has a cell phone number. So I'm like, okay, how do we call and how do we verify this is true? So I call Zuck. By the way, I call him from my summer internship office at Bain Capital.

42:35So I'm like sitting inside some finance company calling him. And I go, my name is Tom Goldberg. I'm partners with this guy, Bob. And we own HS Facebook together. So I want to make sure that you're not, like I'm not getting cut out of this deal that you apparently have with him. And he goes, yeah, I'm going to buy it from him. And you need to sort that out with him. And then I go, well, what are you going to do with it? And I kid you not, he spends 30 minutes. And to his credit, he outlines the entire strategy that Facebook has executed. He goes, first, we're going to go to high schools. Then we're going to go to workplaces.

43:06Then we're going to go into pods. Then we're going to, like, he had the whole strategy. This is in 05, dude. This is a year into Facebook. And he's like, 21. He's like, they must start wearing chains and cool shirts. He didn't know that. Right around the age of 35. He's like 22 or I'm 21. And then he's like, wait, by the way, what was your name again? And I'm like, click. Needless to say, our high school Facebook plan did not work out. They launched and they crushed us. And we went and got jobs in finance. That's an amazing story. That's a sad story. And by the way, isn't the funny thing that like the actual answer was go join Facebook?

43:39Like just go do whatever you can do. At every point in my life, that has been the right answer to maximize my outcome. When I started Ampush, dude, for 10 years, like I was before all their ads. And I did the math because a buddy of mine got a job with same resume, got like a corp dev. And he didn't take it. I was like, he's an idiot, but he didn't take it. But we have his offer. We have his physical offer still. It's like, oh, that would have been worth$75 million. Dude, I talked to a guy the other day who was like the two or three hundredth employee of Facebook. And he was like, I had one hundred million dollars in Facebook stock.

44:09Yes. You know, he worked there for seven years or something like that. What I should have done is said, hey, look, I started this high school competitor. Do you want to hire me, dude? Because I'd probably be like a billionaire right now because it was a year into the business existing. And by the way, like to start Facebook, unbelievable amount of work and genius. to be the founding kind of like first five, 10, 15, 20 people there. Tremendous amount of work. You're scaling something that's massive. And you got to be like really sharp or you're going to get washed out. To be the hundredth or 200th person at Facebook, don't need anything special to be honest.

44:46Or the thousand. Like, hey, get over here. Can you lift boxes for a bit? All right. He lifted boxes for a bit. Hey, can you, we got a bunch of spammers. Can you look at all these and figure out like what we're going to do? tell the team like we need people to filter this and by employee 200 you no longer need to be at the top of the genius curve oh my god dude work you know an incredible amount and you still get rich all right let's take a quick break because i gotta tell you a story let me tell you about the first time i tried to run payroll for my team i was using a traditional bank and you know the type it's got a janky interface it's built like a 2002 tax form and it was open only during business hours and i hit send and it froze they flagged the transaction they locked my account they put me on hold for 45 minutes and then they told me i got to visit my local branch and that was the day i started looking for a new banking solution after asking a few founders what they were using i found out about mercury and so now my payroll is two clicks i can wire money i can pay invoices i can reimburse the team all from one clean dashboard that's why i use it for all of my companies and so do 200 000 other startup founders and so if you're looking to level up your banking head to mercury.com and apply in minutes mercury is a financial technology company not a bank banking services are provided through Choice Financial Group, Column N8, and Evolve Bank & Trust, members FDIC.

45:59Four years into Ampush, I was looking for a head of sales. And our best place to hire salespeople was from Facebook itself, because they knew how to navigate the beast and get us more leads from that. Get this guy. We love each other on the first dinner. He meets two other people on the team. He's four interviews in, and I do the classic talk. All right, let's talk comp for a second, right? We're a startup. We'll give you a couple points of equity. And he gets this very scared look on his face. He goes, Jesse, I'm investing$800 ,000 a month in Facebook stock. How are you going to match that? And I'm like, dude, what?

46:35Good to meet you, buddy. We'll see you later. That is absolutely insane. Sean, have you heard the story about Noah Kagan and how Noah was hired to work at Facebook? Noah was the 32nd or 30th employee. employee and basically what happened is he uh was out at a party and he was drunk or something like that and he tells a reporter a tech wrench reporter we're gonna launch this thing and that thing and it's gonna be the best thing ever and it becomes a news article the next day and zuck goes to his desk and he goes you're fucking with my company you're out and he fires him on month nine so noah was three months away from his first vest and noah's told me he goes had i just made it that three months, those shares today would be worth about$100 million.

47:20Those three months. All because he kind of had a big mouth when he was 21 and drunk at a party. He was Ampush's first Facebook ads client. Believe it or not. AppSumo was. That's awesome. I got his first customers for him. Yeah. And now it's like a business that does$100 million a year in revenue. So it kind of worked out. But it would have worked out a lot easier if he kind of kept his mouth shut. Yeah. But my thought, I don't know how you guys feel about that. I've done that math and I'm like, but I don't think I could have worked. I don't want to work for someone. Of course, you can't look back and be like...

47:52But even if I could, even now make that decision, I'm like, I don't think I would have wanted to work for Facebook or anywhere for that long. Dude, I would. That would have been awesome. What were you going to say, Sean? I think you're both right. So the math on this, just to put it in perspective, let's say you join when Facebook is valued at a billion dollars, which I think it was a few years in. I don't think it was right away, because at the time, it was unclear. or social networking would be that big. And so let's say you join at a billion dollar valuation and your employee, you know, 400, and you're so junior, you're a junior and they give you$10 ,000 of stock a year.

48:27You're going to make, you get a$100 ,000 salary and you're going to get 10 ,000 of stock. Over four years, you've accumulated$40 ,000 of stock. Even at a billion. Today, Facebook is a$1.35 trillion company. So that's, you get - Thousand bagger. Multiply by$1 ,300 times your$40 ,000. It's a$54 million stock option you got for being the janitor at Facebook at the right time, which tells me a couple of things. Number one, picking the right company and project will be by far, picking the right market to be in and then the winner of that market, if you're in the tech industry, is by far the most impactful thing you can do in your career.

49:08It'll beat your hard work. It'll beat your own intelligence. intelligence. It'll be being right many times in a row. Like you just had to be right once in the right time. And I should point this out, which is that at the time or like every kind of like four years, it's pretty obvious what like winning companies look like. So my version of this was I only did two job interviews in my life. The first one was at Monkey Inferno, which was the studio I ended up joining because I wanted to be in a studio. And the other one I did was Stripe. And I could have told you right then, like Stripe is the winner.

49:37Like it's the winner of the starts So the reason that was the only other interview I did was because I was like, Stripe is the winner. It was super obvious. And I've done the similar like heartbreaking math of like, wow, even if I had joined, I would have just been like a sales guy, biz dev guy. Like I had no, like I would no seniority would have made an absolute fortune. Now, on the other hand, you have the Jesse thing, which is like, do you want to do it? Would you, would you actually have stuck it out? And even beyond that is, would you have held? Because there's no chance that I would have held.

50:06I bought Bitcoin in 2014. I did not hold all the Bitcoin. I gambled for Bitcoin away on a poker night one night because I was just playing online poker. I did all kinds of things. That's now a four times$60 ,000 thing. At the time, Bitcoin was like 300 bucks. So it was like, I thought a thousand dollar investment, it was actually a quarter million dollar investment. And so the idea that I would have held is ridiculous. And I don't think the math is actually real because nobody holds for that long. I agree. That's insane. I've got the same story, by the way, with Airbnb. I think I was going to be employee 120 or something.

50:41And I don't know. Also, it was a$20 an hour job. I don't even know if the equity would have been a lot. But you do the math and it does sting a little bit. But dude, I mean, the one way, like I worked at Goldman, I was 25. My 29-year-old boss made$2 million a year. My 35-year-old boss was making$15 million a year. And I got off that path because I was like, I don't want to like sit here and look at spreadsheets all day. It's a very not dynamic job. I looked at my boss. I said, do I want to be them one day? And I said, no. And I literally wrote this down to keep myself honest. I said, I'm okay with half my personal expected value to be able to do my own thing in the future.

51:20I don't know. I've never rerun the math, but I had to make that decision for myself. What's a$15 million a year employee at Goldman do? There's a bunch of jobs that make that kind of money. But in my world, I was in the buy side hedge fund. They were investing. We had a$7 billion fund, two in 20. If the thing delivers 10 % a year, the fees on$7 billion are like, what? $140 plus on 10 % is$700 million. It's like$350 million in carry. And there's four senior people. Now, if Goldman might even get half of it or whatever, but they're paying 50 % out of whatever the people make in the hedge fund world.

51:57But then bankers make that much. I mean, all these financial services at a seniority level, they all make tons of money. There was a guy who endowed a scholarship I got when I was at Penn who was a partner at Goldman, head of the infrastructure fund. and it was making 55 a year is what he told me. And then when he told you, did he just like smirk the biggest smirk you've ever seen in your goddamn life? And it just, it was permanent. He had a facial. But I saw that. I was like, yeah, but you've been there 30 years. And like, have you ever been in those atmospheres? None of the three of us would last more than two or three years in those atmospheres.

52:26They're not, they're political. They're smirming. It's not, I don't know. It was more than money, right? I totally agree. I think our actions have showed that, But I also think it is entertaining to see like just the, the, the sort of mind bending amounts that people make doing certain things. And in the, in the case of joining companies early, like, wow, that that's kind of it. That's all you really had to do in terms of like financial success. There's a funny tweet that Chamath put out the other day where he was like, Bill Gates, um, you know, if he had just basically held his Microsoft stuff, it'd be, I think the richest man in the world or, you know, number one or number two, something like that.

53:03And, and instead, you know he did the gates foundation he did a whole bunch of other things he like sold and then has a family office and um the top reply which was like a huge ratio was like now do you with meta right because yeah he leaves facebook he's like great i got a billion bucks and then i'm gonna do social capital i'm gonna do this i'm gonna do that and for you know to do spacks i'm gonna do all these things for like you know the next 12 years 15 years and if he had just simply like held the meta stock and chilled he would have financially out far outperformed his own you know is on brilliance doing all this different investing action.

53:37Yeah, but that's the thing. That's why you got to do things that you actually care about or that light you up or that motivate you in a way that's different from cash. Because, I mean, dude, the other thing, I mean, you guys probably have friends like this. I have friends who are worth more than I am, who have much more money, but they got it through a meta-type situation. They're like the most insecure. They're like, oh, I just got lucky. They're afraid to talk about it. It seems like a horrible existence. And there's a lot of people I know like that. I met one of the founders of YouTube, once and the guy was like, my lotto ticket success.

54:07He was very unhappy with the amount of money he had made. So you think that it's like, I'm on easy street. But the psychological thing, people feel like fraud. There's a whole other vector of challenges that come with it versus I think all the three of us are founders. You start a business. Whatever it is you made, you made it. You know you did it. There's a different element to it in my opinion. I like talking about it the same way I like looking at mega mansions on the internet. It's fascinating into one part of my brain, but then the main part of my brain is like, I wouldn't even want that out.

54:36Yeah, exactly. Like not even in the, it's like, dude, that's way too big. That wouldn't be fun to live in. That'd be uncomfortable. And man, the maintenance of that would be like a pain in the ass. Like that's not what I want. In the same way that when we got acquired by Twitch, I had thought in the last seven years I had worked towards like, I want to build a successful tech company, right? I was in the venture capital world. Success in that world is you build a billion dollar plus company. We were doing like a social type of product, a media product and twitch is like one of the 10 winners that that like actually existed and then i saw emmett's day-to-day and i was like oh man i would be miserable if i was doing this and not even in a like like it was just that wasn't fun like his job fundamentally was like putting out fires and you know all problems roll up basically and like it's the worst problem rolls up yeah shit rolls up exactly and it's the worst problems that rolled up past your executive team because they would solve a bunch of them but the ones that they can't really solve cleanly roll up to you.

55:31So you get the worst of the worst that roll up to you. And he would sit in a conference room and basically his calendar was managed by somebody else. There's a 30 minute block and another 30 minute block and another 30 minute block. And he's reading memos and he's doing decisions all day. And I'm like, man, this is not like, the fun factor is not there. And that's when I started asking a question. That's why I started this podcast. I was like, who's having the most fun rather than who is the most successful? Who is the most rich? It's just fundamentally who's having the most fun. And I remember looking at Joe Rogan.

55:57I was like, I think Joe Rogan's having a blast. It seems like he basically, the podcast, which is like an unedited, unscripted thing, he's hanging out with comedian friends or super interesting scientists and paleontologists and just fascinating people like that. And then on the side, he does comedy, which is like a craft that he really cares about that he does. He does the UFC, which is his hobby. And he gets to commentate for that and sit ringside. But he also doesn't overdo any of the things, meaning he doesn't do his podcast in a way that's like optimized for views. He's not like, he's like, I want to do a three hour conversation because that's what I want.

56:33Not because that's optimal for the algorithm. For UFC, he doesn't travel. He's like, I'll do the ones that are nearby me, but I'm not going to fly around the world every weekend commentating this. Like, I hope that works for you guys. Same thing with this comedy stuff. He's like, you know, I'm going to do it the way that I want to do it. And when I saw that, I was like, okay, that is a different model of success that I, you know, I want more than than kind of what I wanted in my 20s. You use Joe Rogan, but I honestly think you can apply that to anyone like my hedge fund friends who love hedge funding.

57:01They're happy. They love it. It's finding your thing. It's finding the thing that you really enjoy and then just going all in on it. Those are the people I think who are winning. You really got to enjoy like doing it a lot because it all really sucks to get there. Like, do you guys remember Zuck in 06 to maybe it was like 08 to like 15? like I would not have trade places with him. I wouldn't, I would never in a million years trade places with Elon Musk. But the idea of like having all these things. Me neither. No trade. I also reject that trade, Sam Bar. Yeah, very, very, very fair of him to say that.

57:35But it does seem cool. Like, I guess what I mean is like, I could acknowledge that that seems awesome. That would be cool to have. And also, I'm not willing to do it. But it's that's like fantastic. Yeah, I think one of the most powerful things is figuring out what's cool. there's a difference between cool for you and cool for me, right? Like there's so many things where I see people's life set up and I'm like, that is super cool for you. And like, I don't mean that in a negative way. It's like, I do think it is super cool. And I think it's even cooler that it's what you wanted, but I have to figure out what is cool for me look like.

58:06You know, what's funny is our last episode, you talked about the seven spiritual roles. And I, you, you talked about that book that you were reading or how you were thinking about reading or something like that. And I went and bought it because I personally, I'm in a little bit of a place now where it's like, I think some people call it the second mountain. You already achieve a little something to where you're secure, but you're like, all right, but what's a problem that I want to work on or a way to spend life that may be a little bit higher up on Maslow's hierarchy of needs? And so I'm personally still asking myself.

58:39It's not defined yet for me. Jesse, do you have one? I'm curious. Yeah, I've done, I think Sean, you know this. I've spent probably the better part of six or seven years on this personal growth journey, which has turned into like a spiritual journey. And the defining moment came for me maybe three years in when my coach was like, what's the one thing you can't not do? It's like a really weird question. And the exercise for it, you know, you can do it, Sam, right now is what's the one thing you can't not do? Write down a few sentences and then every week look at those sentences and see if they seem to grow with you.

59:10That's a good idea. And in one funny way, he's like, what's the thing that comes in the room when you show up? What's the stench? Because his point was, we try to make purpose this far out thing we have to go get. And it's actually the thing already inside of us that we just need to tap into and live more fully. And for me, it was, I love helping other people be the best versions of themselves, raise their game to the next level of what they're capable of. Even in this podcast, I think I taught you guys two new things. It comes out, it's not purposeful. I've made it more purposeful now. But at the time, it wasn't.

59:40But it was a thing any of my friends would tell you about me, any of my employees would tell you about it. like, dude, Jesse walks in and like the bar goes up and it's like an exciting go up. And, and so I've really like one of the interesting examples of this, he goes, so how do you keep your to do list, Jesse? And I was like, oh, initiatives or clients. And it's like, what if you kept your, your to do list based on your people you worked with, like executives and how you're helping them be the best versions of themselves. He's like, you'd probably still like get the work done that you need to get done, but you do it in this very inspired way.

1:00:07And Gateway X, I mean, Gateway X is a whole function of me going, the thing I want to do is help other people learn and grow. I'm not the CEO of any of these companies. Like now I do actually keep my to do list that way. I don't write growth assistant or ox. I write Adrian and Casey. And I'm like, how am I helping those people? And I find it's a weird thing when I frame my success or my life through the PNLs of those businesses, I get very like, like I'm not, I'm not as powerful. I'm like a, you know, more scarce minded person. And when I frame it as the like, how do I help those individuals, which is the same shit because they're running the businesses, I'm creative and I'm happy and I'm more flowing.

1:00:43So for me, it's like, that's the thing and it feels really energizing for me. I think I could do it for a really long time. And obviously the setup, the way I've got it set up matters a lot too. I'm not running any of the individual businesses. I don't think I want to. I don't want to run staff meetings. I don't want to run comp plans, hiring, all these things. I did it. You guys have done it. It's not what I want to do, but I do want to help grow each of these businesses. Dude, you're awesome. I appreciate you doing this. Thanks, man. What do you think? It's great to see you. By the way, how'd you get an Ellie at your birthday party?

1:01:13What was that about? Tell that story before we go. Give us the quick one. So I turned 40 in May, as you guys know. And I have a cool video montage of the party. My wife had an awesome party. But I've been telling all my friends about St. Louis since I was 18. So I went to college. I'm like, St. Louis is the best city, whatever. And everyone's like, I'll move back there one day. They're like, no, you're not. And then I moved back. And they're like, oh shit, you moved back. And so I had 200 people in town who I've been raving to about St. Louis for like 10 plus years. So I'm like, what's the most ridiculous thing you could do if you're me having your 40s?

1:01:44Like Nelly. I mean, you guys are somewhat similar in age. From my high school to early college, Nelly was like the biggest rapper on the planet. And he's from my hometown. Nelly was our guy. He was the first famous St. Louis guy. And it doesn't matter what race you are, how old you are. Nelly was like our son. He made us so proud. If you're in your 30s or 40s, just close your eyes. I'm just going to say a few words that'll just take you back. Country grammar, Air Force Ones, EI, Hot and Her. Oh my God, like just the memories that come with those words. So I'm like, all right, what's a ridiculous thing I could have at my party?

1:02:21I'm like, have Nelly perform there. So my wife goes through the normal channels. They're like, you know, he basically doesn't do this, right? So he's like, look, it's$300 ,000 just as a starting price. By the time you do it all, it's half a million dollars. and I'm like I want to die with zero but like that's a little little rich for my blood I don't want to live with zero yeah so I'm like alright we're not going to do that and then I kind of am sad for a few months and then the entrepreneur in me goes wait come on there's got to be another way to approach this right so St. Louis is not a big place I ask a couple people I go you know Nelly's people right and I'm like can you introduce me and so I get to know they're great there's this guy Mike Chafin there's wonderful guys I get to know them and you know they introduced me as this guy who's like an expert digital marketer e-commerce guy.

1:03:03So I'm like, hey, what's going on? What's going on in your world? Nelly's actually working on two big e-commerce businesses. His team is. And I go, ooh, tell me more. And they tell me all about it. And I'm like, okay, well, here's the thing you should think about and make sure you tag this problem. And they're like, oh, wow, you know a lot about this. And I'm like, okay, how can I be helpful? And then I just basically have been working with them. And right, here's a Shopify app, do this. Here's a good contractor for this. They're helping their team get it going. And at some point it came out, the aux business came out.

1:03:35And I'm like, yeah, I charged private equity firms like two,$300 ,000 to do that. Right? And they're like, oh, but you've just been doing it for free. Like, what can we be helpful? I'm like, it's funny you ask. A young man's dream would be to have Nelly at his birthday party. And, you know, they're his people. So they're like, well, let's go talk to him. And they go, well, he's got to meet you because he doesn't know who you are. And if he doesn't know you, so I take my wife, you know, I get my sort of urban, like going, I'm there. and we become, he's a super nice guy, really friendly. Dude, have you ever been more nervous walking up to that meeting?

1:04:05I was nervous. My wife was super nervous. She's like, why the hell am I here right now? We meet him in like this Soho wannabe in St. Louis, Soho club wannabe. You go for the handshake, dap up? What are you doing? Yeah, you know, not the handshake, but the, you know, pull in. Yeah, yeah, of course. And so that goes really well. Yeah, my guy. You start using that phrase, my guy. Yeah. and he asked me so what do you want to do and I think like I was like oh man you got to come out to EI we got to have the intro it's gonna be like and he like looks at me he's like okay you're a real fan I'm like yeah man this like you were the guy so they're like okay Nelly loved you we're in then they're like wait what was the date again it's May 25th like well he's in Napa on the 24th night at some festival and then he needs to be in Vegas on the 26th day for a day party and they're like there's just he would do it as a friend now because you've helped him, but he just can't make the date work, Jesse.

1:04:59And so again, I'm like depressed for 48 hours and then I'm like, no, fuck this. I'm like, what if I fly in private both ways? And they go, we'll talk to him, come back next day. Okay, he'll do it, but it's got to be a G4 or better. Oh my God. Because now he does not fly in anything below a G4. So I go and I do a bunch of like, you know, I've been flying private a little bit since the Ampour sale, but I was like, talk to a bunch of these brokers and I basically get them to beat each other up and it was round trip. So it got a little cheaper per hour than it normally would. But for 60 grand, I got him a round trip on a G4, Napa to STL, STL to Vegas.

1:05:32And he rolls into the, you know, he rolled. And he, by the way, he was amazing at the party. Like I'll, I'll text you guys videos and stuff. Like he, but it was scary because he wasn't under any contract with me. So he could have come out, said, hey, happy birthday, Jesse. EI, EI. And he could have left. He ends up doing a 45 minute set. And he, he told like his manager, manager told me, he's like, dude, he was like so hyped. there's like all these Indian people who like knew his music. Like he was so pumped that you guys are all just like rapping. My brother and I are on stage rapping EI with him.

1:06:03Like it was dude, it was a top three life moment. Like it was unbelievable. That's so awesome. It was the best, like it was honestly one of the best hours of my life. It was super cool. Little Dickie, if you're out there listening, I would, I'm turning 40 in a few years. I would love to start, you know. Yeah, you got to save that money, dude. You got to save that money. Yeah, you have to hope that his career just goes down. Well, I told my wife, I'm like, for your 50th, I'll get Beyonce because hopefully by then I'll have a little more money and her stock will be down. Yeah, we got to just catch them right before they hit cameo.

1:06:38So they can't be peaking. They got to be on some sort of a decline, but not all the way rock bottomed yet. So that's what we're going for. Jesse, we appreciate you. You're the man. Thanks for doing this. Me too, guys. Good to see you. All right, that's it. That's the pod. I feel like I can rule the world. I know I could be what I want to. I put my all in it like my days off. On the road, let's travel, never looking back.

1:07:06Hey, let's take a quick break because there's a quote that I love. I want to read you. It's that we shape our tools and thereafter they shape us. And you know, as an entrepreneur, if you're using a bank that was built in the nineties, you're operating like you're in the nineties. And trust me, I've been there clunky portals, random holds on your money,$50 wire fees, and then being told, please visit your local branch. Well, that's why I switched to a different type of banking solution. Mercury. It turns your financial chores into a smooth workflow. You can do wires, invoices, cards, reimbursements, two clicks, and I'm done.

1:07:36If you're already using Mercury, respect. If you're still using one of the old big banks, I got questions for you. So go visit mercury.com and give it a test drive. Mercury is a financial technology company, not a bank. Banking services are provided through Choice Financial Group, Column 8, and Evolve Bank & Trust members FDIC.