From $0 to $100 Million In 3 Years Selling Cold Plunges

25:36And those are the pages that you need to be the number one search result for. The way you do it is by creating all this goodwill around the other pages, the sort of SEO goodwill. so I think you would think that short form video is hard to monetize, but that's not what you're monetizing. You're not monetizing the short form video. You're monetizing the trust. So today, who is both the most trusted voice in science and supplements and the man most likely to be in Sam's fantasies? Yeah. My husband, Andrew Huberman. Exactly. And as a, what do they call them? My Huberman husbands or something like that.

26:16what did they say uh so i i posted a shirtless picture of him and he's like and i and i was like uh people were like what did they say they're i'm huber's i'm huber's man uh yeah he he posted his first shirtless video the other day and uh men around the world were gasping clear the calendar honey yeah all right so huberman makes money through his ads and his podcast but remember when Rob Dyrdek was on the pod and he was talking about Momentus protein? And he's like, yeah, Momentus was kind of dead in the water. We thought we had made the best cleanest protein, but it really wasn't going anywhere.

26:51And then we did a deal with Andrew Huberman and we were like, how much did you pay him? And he goes, I don't know. Whatever it was, it wasn't enough. And he was just like laughing at how crazy that was. So, you know, I think the business model here is you build trust for a couple of years and then you come out with your own branded supplement, right? You want to be in the supplements game. You don't want to be the Australian. That ruins your whole premise, though, of finding the most trusted. No, no, no, no. You are the most trusted. You build the trust by saying, and then finally you say, look, I've had it with these companies.

27:25I've had it with these. I am just going to make the one that I wish existed, the one that is truly clean, that is going to hold the utmost standard, right? Derek from More Plates, More Dates, that's exactly what he did. Somebody like Jessica Alboy with Honest Company kind of did the same thing. She built up a bunch of fame and trust in one area, but then she comes out with the Honest Company and she's like, this is going to be the Honest brand, the product I want to give to my kids. Which, by the way, I buy Momentous Protein in part because I trust Rob and Rob was involved. And I buy BPN, which is Nick Bear, the Jack guy who runs fast.

27:57I was like, well, these guys both seem trustworthy. I'll buy their stuff. So I spend all my money with them. Right. Because what else do you have to go on? You have nothing else to go on this packaging or that packaging, right? What else do you have to go on besides the words of somebody you trust? And so I think that's the way you do this ultimately is you ultimately build your own supplement franchise around this more like the Honest Company. But I think first for a couple of years, you are just becoming the most viral trusted source when it comes to the truth about X. and you got to pick things that are going to be very shareable as well as, you know, establish your authority in that niche to be able to, I'm the most knowledgeable, trusted source when it comes to what should I be taking?

28:42By the way, we've talked about the eat this, not that category and we loved it. I think we talked about it a year and a half or two years ago. We love the eat this, not that category. It's the best. I love that stuff. When did we say that? Because I remember talking about FlavCity because that's his thing, right? Eat This, Not That. I mentioned it maybe a year ago, but I really hadn't fully wrapped my head around it. So Eat This, Not That was a line of books. I remember buying it at Barnes & Noble. I don't even know how to say it. How do you say it? I used to call them Barnes & Nobles. I remember buying it at Barnes & Nobles years ago when I was in fourth grade.

29:16It was Eat This, Not That, and it would just show a picture of Doritos, and then it would show an alternative, and it would explain why. It was a massive hit for a book series, and I remember buying all of them. and I think we said we're like fine for a book but this has to be beyond that and we talked about it I think with Steph two years ago yes yes so I think this is a clear like content niche that can turn into a pretty monster business and there's a bunch of different angles depending on who you are Derek for more plates more dates obviously hits the Jimbro market but then Flav City hits the like mom shop Costco shopper market and you should just keep there's a lot more niches than that the New York Times did this article the other day or a few weeks ago.

29:56And it was, my guru is better than your guru. And they talked about how people like you and I, you know, you and I are team Huberman. But then there's this other group who's team Peter Atiyah. There's this other one who's team Peter. Like my father-in-law loves this guy named Mark. Mark Heinemann or something like that. And it's like, well, my guru said this. And it's just crazy how we find these guys that we stick to. And whatever they say, we don't know. like I can't tell you entirely why Heberman suggests X, Y, and Z, but I know he suggested that. And I will go to bat and fight other people whose their guru said X, Y, and Z.

30:33And I don't even know why. I just know that I trust Andrew. That's my guy. And I thought it was really interesting how it is turning into be something like that. Have you ever heard this explanation of why gossip exists evolutionarily? No. It's sort of nerdy, but it's kind of fascinating. So everything has a value, right? Even what we consider negative emotions like fear. Why does fear have value? Well, if you're a hunter-gatherer and there's a lion, fear or paranoia can be a very useful survival tool. And you need it to be super fearful and paranoid at a certain period of time, maybe less so today, but we can see why that's evolutionarily baked in.

31:11But that applies to everything. And so gossip is a good example. Gossip, if you just talk to most people, gossip, negative thing, right? Shouldn't do it. bad, you know, poor form. It's a, it's sort of a lowly thing to do. And actually gossip is extremely useful. So you think about humans live in tribes and we're in this society. Well, it's impossible for me to know one by one with each person about their character and their reputation myself through only firsthand experiences. And so how does a tribe function? Well, gossip is actually a necessary thing. I should know that if this person is untrustworthy because rumors should spread so that the tribe as a whole becomes almost immune to this charlatan through gossip.

31:54And I don't have to myself go and have a firsthand bad experience. So in that way, gossip has saved me from getting my hand burned on the stove many times. And so I kind of feel like the same thing exists where it's sort of silly in a way to, oh, you just trust these online influencers, these gurus. Don't you know they're just trying to sell you something? well yeah and there's there's some amount of that but at the same time what am i going to do go test all my supplements myself like the inefficiency that would be brought in if i didn't trust these people what am i going to go read all the white papers myself about clinical studies no i'm not going to do that i'm going to we're all going to outsource that task to somebody and we're going to trust them until they burn our trust and then we're going to move on to the next one but like almost like as a tribe, it is the efficient way to do things, even though it's kind of seen as this low IQ move.

32:46It's actually not a low IQ move. It is the sort of game theory optimal move to trust people or to trust gossip in certain situations where you're not going to want to do the first-hand work yourself. Look, if George Foreman tells me what grill is best for my bratwurst, I listen to George. He looks like he eats a lot of bratwurst. No, I get it. Did you just go and read a book on gossiping? Where did you get this? I heard this a long time ago. My brain was just connecting the dots just now. I want to tell you about another health company that's related to all this. But before you do, we have a quick segment.

33:18It's called Thrill of the Shill. And so it's a time where we're each going to take a turn. Your turn is this time to promote whatever we want. But it's the Thrill of the Shill because you're going to shill something. But you're going to thrill me a little bit. so about eight months ago you invested in a company called shepherd yeah you sent me a graph i get updates every once in a while i try not to get too much information because i don't ever want to reveal something i'm not supposed to reveal but you sent me a graph things are going more than good i think i think it's you could say how many times it's multiplied but now is your 60 second thrill the show moment oh amazing oh the pressure is on to thrill with this show listen the way i'm going to make this thrilling is I'm going to share a little info.

34:04Share a little info, not about the business and the internal numbers necessarily, but about what's working. What I can say, high level, the business was already doing great before we joined. The company's called Shepard. What they do is they basically make it easy to hire. I was using them to hire for my e-commerce company because I wanted to hire more people but I didn't have the budget. I was like, Shepard has talent in the Philippines, in LATAM. We needed a Shopify developer. I can either pay an expensive agency or hire some guy. But I found a guy for$2 ,500 a month who's awesome. And I did the same thing with customer support.

34:36And I did the same thing with a whole bunch of these roles. And so I was using them. And I was like, this is a great business. And I'm going to buy into it. So I bought into it. And since then, the business have basically tripled. So we've tripled the business in eight months. And the business was already doing well to begin with. So that was kind of like way exceeded expectations. Now, what actually worked? Well, when I joined, I thought, all right, boys, I'm coming in hot. I got ideas. I don't know if you've heard. I got a business podcast. I think I know a thing or two about business. Why don't you listen to my ideas?

35:06And I had all these exotic ways that I thought we could make things better. And the reality was, the big lesson, the big takeaway here was a lesson that I had heard early on in the podcast. There was a guy who came on this podcast. I don't remember his name, but he has a bag company, Peak Design. I forgot his first name. Sorry. But Peak Design. And I was like, dude, you sell like$80 million worth of this camera bag. what the hell, man? What was your growth hack? What's your secret? And he's like, oh, dude, I used to listen to all these business gurus. And they talk about this advanced planning and long-term thinking and super strategic stuff.

35:40He goes, to me, business is the six inches right in front of your face. And I was like, what? And I was like, this is also the speech from any given Sunday? And he's like, yes, business is the six inches in front of your face. And you just got to keep knocking out the six inches. And so when we were talking about Shepard, it was like, all right, cool ideas, Sean, but what's the six inches right in front of our face? And we basically did one thing. One thing that really, really worked. And the one thing that really worked that was not expected for me was they just did a very simple analysis. They go, how do we get more of our best customers and less of our worst customers?

36:19Which I think an exercise anybody should do. Did you ever do this with either advertisers at The Hustle or Hampton? Did you ever bucket out like who are the best customers who are the worst customers because the worst customers take up 80 % of your time basically what happens is you get in this habit of where you're just like I'll take any amount I'll take any customer and take any money whatever I'll just do whatever and then you get all these shit people and then you're like oh my god this sucks like this guy takes so much time and I don't even make that much money from them I have to learn who do I fire and who who's who do I go after instead exactly and what most people do is they do it at the beginning, which I think is the wrong move because you don't really know.

36:55And you do need to be just a little bit desperate and kind of brute force things. But there's a point where you got to check in. Like, you know, if nine months in, you haven't checked in, do this check-in, which is basically draw a little piece of paper and write our top, you know, 10 to 20 % of customers and our bottom 10 to 20 % of customers. Bottom is like drag out your time, lowest profit, you know, like most headache, most support required. And then the top is the opposite. And so we did this little exercise. And the thing we realized was we thought the business was people hiring virtual assistants because that was the most common thing people would come in for, right?

37:26You come in, you need a VA just to do some tasks, or maybe it's a personal assistant for you or travel booking, meeting, scheduling, that stuff. And it does do that. That's fine. But then we were like, yo, who's this group of customers that they hire twice as much as everybody else? And the LTV, the lifetime value of these customers is also 40, 50 % higher. So who was it? And it was people who needed bookkeepers. I was like what and they're like yeah bookkeepers and they're like you know the reason we didn't see it is because it's all concentrated in certain spikes so basically bookkeepers everybody hires them after tax season it's like you go through the pain of tax season and then you're like all right never again am I going to feel that and so you're like companies will basically hire a bookkeeper like dude it was such a mess such a time suck this year we just need a bookkeeper and we're like a small business we don't need like a fancy bookkeeper let's hire an overseas bookkeeper.

38:18And so they do that. Or accounting firms or anybody who is a tax company, they need more bookkeepers or they're a bookkeeping firm. They need more bookkeepers. And so they would hire lots of the same talent. That talent is priced a little bit more. So there's more profit on that hire. And so anyways, just by identifying one little thing, but there was like three things like that that we did. Those were the tweaks that weren't very sexy that made a big difference. So that's my little, my thrill of the shill today is to remind you, go do that little 80-20 exercise on best and worst customers once you're like, I don't know, right around a year into the business because it will refocus you in a good way.

38:55You got to give the URL. Oh, yeah. So go to supportshepherd.com for whatever you need to hire for, whether it's bookkeepers, virtual assistants, developers, designers. They got, you know, basically they go find the top 1 % of talent in these countries. They got boots on the ground. They're like literally interviewing people. and then you can go find the elite talent there for basically 80 % less than if you hire people in the States. All right, that's the thrill of the shill. That's pretty good. Pretty good first thrill of the shill. Yeah, I was thrilled. All right, let's take a quick break because I got to tell you a story.

39:27Let 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.

39:58That'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 and Trust members FDIC. All right. So let's do another one. So I got one thing for you. So did you see, Trung tweeted this out, and I found this kind of interesting. So he tweeted out about this Chinese quibi. Did you ever see this tweet? No, but is it working? So yeah, I think it is, which is the funny part.

40:36So is it Chinese as an in China or for Chinese American, but Chinese content is Chinese like tick tock is Chinese. It's made by a Chinese company, but it's at the top of the US charts. It's a company called real short, real short. It's called real short. So basically, here's what he says. It's bite sized English scripted video content. So it's like Quibi, but instead of paying for Hollywood hitters, it's cheesy degrade soap operas slash Hallmark films. the shows are all about affairs scandals, marital intrigue and absurd plots, for example son-in-law's revenge I'm getting married without you or never divorce a secret billionaire heiress, let me just pause here, I'm in on real short, okay, that was all I needed to hear, this smells like a winner to me, alright so I like this general concept, short video that's scripted versus just like people's, you know, TikToks but it's like junk food.

41:35It's junk food content. It's like Maury Povich Hallmark film. It's just stuff that it's not highbrow. It just appeals to people. People have to turn their head to look at this stuff. It's like Hallmark, right? So he goes, a show is typically 50 episodes. Each episode is only 90 to 120 seconds each. They started off by adapting a bunch of Chinese romance kind of soap operas for Western audiences. it's free to watch but you watch ads to unlock more episodes or you can pay coins to unlock them faster TechCrunch estimates that this app has been downloaded 11 million times already across iOS and Android and generated over 22 million dollars in revenue since August 2022 so 22 million dollars in year one not bad it's owned by this Chinese company COL group and they're expanding their audience because the shows were so kind of like addictive and bad that they were banned in China.

42:34So where do you go? America. The Las Vegas of the world. Where anything goes. And so they brought it here. Pretty crazy. And so what do you think of this concept? This is insane to me. So the actors and actresses, they're white people. So is it white? Are they appealing to Asians? It's like everything else. Made in China. Made for Americans. So who's buying? I mean, so this is just boggling my mind. So you know Hallmark? You know Hallmark, the cards and channel? Familiar, yep. So that company still does about$5 billion in revenue. I think it's a family-owned business. So it's still a huge thing.

43:13Wait, is it the shops plus the TV, or are they separate businesses? So the whole company does$5 billion in sales. But I think a significant amount of their revenue is not from cards. I think it's from the channel. So it says worldwide Hallmark has 27 ,000 employees. Holy crap. So and Hallmark channel is like a big line of their business, which I think they sold part of it to Liberty Media. And so it's like a huge company still. And I think it's family owned based out of Missouri. Yeah, yeah, that's great. Okay, so Hallmark's great. So you're in. Tell me you're in. So a few years ago, I've told this before, my friend Ramon and I ran a test where we created this book called Captivating Claire.

44:08I think that's what it was. Was it called Captivating Claire? And basically, Ramon ran a soap opera website. And he had this guy on his staff that loved to write short stories. And they were erotic short stories. And what we did was we created a WordPress blog, and I think we called it shortbutromantic.com. And basically, over the weekend, he wrote a story on a Friday. On Friday night, the WordPress blog was made. And at the very bottom of the WordPress blog, it was basically just one page of a blog post. And it said, We hope you enjoyed this first iteration of Captivating Claire from Short But Romantic.

44:48if you want to see part two here's a paypal link it's ten dollars a month sign up and we will mail you the part two of the story next week when it comes out and we used fiverr and we got a narrator to do it this whole project took four hundred dollars we drove traffic for it the next day on saturday we had like three hundred dollars in sales um and we were like holy crap and if you look up the blog you might have to use web archive to do it uh but because i think we took it down or the domain expired. I remember reading it. If you look at the blog and you go to the comment section, you'll see these people were obsessed with this.

45:24They were like, oh my God, cleared at this. I can't wait to read part two. And it was mind boggling. And then we were on Sunday. We were like, we don't really want to be in this business. Like this doesn't really fit our interest. I think he should still should have done it. Well, he was going to. Ramon was going to do this business. We both invested in him. He was about to do this business. Then one of his other businesses kind of took off. So that. Yeah, dog ramps took off. But he was really dead set on this. And I was like, I don't know. It seems like it could be pretty great. And this real short is proof that that idea, I think, was on to something.

45:59I was amazed at young women and what they wanted to buy. Me and you were undoubtedly, we're trying hard with this channel. We go every week. We work on this channel. We have YouTube and it's growing. We're doing great. Small and mighty. We've been climbing up the charts. And in about a year, we got to about 350 ,000 subscribers. And when we really knock it out of the park with a great episode, we might get a few hundred thousand views. Well, just go look at Real Short on YouTube. So somebody started uploading the Real Short episodes, but like episodes one through 20 together. So Real Short Romance, 330 ,000 subscribers.

46:39They posted a video like two months ago. and it has, you know, it's the double life of my billionaire husband. 3.7 million views. Go look at the comments. It's exactly what you're talking about. Christine Joy says, I hope there will be more video from these two. The chemistry they have. Heart emoji. Prayer emoji. Dude, and they're not even optimized. They have a real short watermark on them and it's vertical video. Yeah, exactly. And another person, you know, Jolen Bongo 6996 says, oh, I watched this on Facebook Reels and I got hooked by it. I love the story and the cast. Good job, guys. I can't wait for the next episodes.

47:11and there are thousands of comments in this comment thread that are all about, I can't wait for the next episodes. I love the storyline. This is better than Hollywood. Oh my God, I'm hooked. This is working. And this is, you know, what is my take here? So my take is, number one, interesting business that I'd never heard of. Good job, Trunk. I'd never heard about this. So I'm glad he put this on my radar. Second thing, the difference between a good idea and a bad idea is just a few small decisions. Quibi gets made fun of as a classic Silicon Valley idiotic startup. It's like, oh man, remember Quibi?

47:44It's like the butt of a joke in Silicon Valley. Yeah, this will be as successful as Quibi. Quibi, I think, was the right idea. Small micro-content, like TV shows shrank down, I think can be really successful. The problem was they raised$2 billion and spent it all on really high production quality stuff that wasn't that juicy and never got people hooked. Whereas real short is basically starting with getting people hooked and then figuring out the rest as it goes. The third thing is, the third takeaway is, why do I have so much faith in the Chinese? When I even started to read his tweet, I was like, oh, a Chinese company is trying to do Quibi, but better?

48:20And I was like, probably going to work. I would bet more on this random Chinese company that I've never heard of than Jeffrey Katzenberg, the guy who created Quibi that was the creator of DreamWorks. And why is that? I don't know. Maybe it's because through my e-com brand, I do business with Chinese companies, and the way they run their businesses, I mean like that's my real MBA is when I talked to like the factory owner in China about how he's running his business and I watch how he moves and he came out here to meet us and we're talking to him and you know just the way they conduct themselves is awesome the way they work is awesome they're like level of complexity they can like handle is awesome and it used to just be with manufacturing only and then TikTok came and was a total narrative violation it was like oh you think they could just you know make cheap plastic toys no no no watch this we'll make the hit social app that's all about cool and culture.

49:10We'll appeal to the U.S. team better than an American startup could. That's amazing to me. It's a lack of ego is what it is. So Quibi was this cool LA company. I think they even reached out to you and I. They're like, you guys want to make content for this? Yeah, you want to do a business show? Business talk scripted? Yeah, I was like, I don't know. But not that we're quote, cool guys, but we are based in San Francisco and we lived on paper what seemed like an interesting life, like people building startups. Let's just say it. If you're going to spend money on us to start your platform, your platform's going to fucking fail.

49:41All right? Obviously. We should not be part of your platform. But they went after cool people. I imagine they have big-time celebrities and shit like that. Whereas I think a lot of people in Silicon Valley and LA, I think they do the same thing. If you look at a lot of the DTC brands, it's like they spend most of their money on shit branding some agency that was overpriced with lowercase letters based out of Brooklyn. And in reality, this whole middle America, I think, particularly since a lot of entrepreneurs in the tech space are young men, they forget that there's this whole contingency of 150 million people who are at home and they just want to goof around and watch something like this.

50:22And their ego prevents them from creating something that's, quote, low quality, which this fits that bill. You would see this and you're like, this is stupid. No one will watch this. whereas someone else who's just like, yeah, dude, I just want to win. I just want to do whatever it says. I'm going to follow the numbers. And I think a lot of people would be embarrassed to create this thing. And I don't think they should be, but I think they feel that way. Whereas whoever we're talking about, these Chinese folks, they're just like, yeah, but we're just setting out to build a great company. Right.

50:49You know what I mean? Well, what is their demand for? We can be supply versus, you know, we hired, you know, if your company has 20 % of people that wear non-prescription glasses, like you're not going to make it in this game? Because you just have too much hipster in you that's not actually going to focus on what the market wants. You're going to try to sell them what they should want rather than what they actually do want. Someone tagged us in this picture of a Thai restaurant and it was called Thai Near Me. Thai Food Near Me. Yeah, Thai Food Near Me, where it was clearly someone was just naming the restaurant AAA Locksmith in order to rank high on Yelp.

51:23And that's that immigrant hustle that I appreciate and I respect. And they actually made their branding cute. It was like a cute sign and it was clearly a joke. But that is lacking, I think, in a lot of our circles. And this app, Real Short, they don't have that. It's Thai food near me. Yeah, it's Thai food near me. They own a store and they're like, oh, it looks like people buy a lot of vapes. It looks like we're in the vape business. You know what I mean? And I appreciate that. Man, these kids love this grape flavored smoke. We're going to start selling more of that. Even though I don't always agree with it, I appreciate the mentality.

52:01So you weren't there for this one, but I did an episode with Jess Ma. I don't know if you heard it yet. Yeah, I started watching this morning. I love Jess Ma. Do you know her besides the episode? Had you met her? Well, so Jess Ma was... I was going to ask you all about her, but Jess Ma, I know her as... She was the prodigy. So she was on the cover of magazines at the age of 19 or 20 for starting in De Niro and accounting software. She was like the person on the cover of Inc. the month before me was Elizabeth Holmes. yeah so she was like the it person for a minute but then over the last like six years she's went silent which in my head that either means you've done something bad or you're just quietly killing it and you just don't want to talk about it and it sounds like the second one was definitely the answer and in de niro has been crushing it and she's been taking the profits or money from that and doing more things is that right yeah pretty much exactly so she was like all right in there is a good business it's not going to be a monster business she had like a crazy life experience where her boyfriend died suddenly and then she was like just kind of depressed, didn't want to even go into work and was just like, all right, what do I want to do with my life?

53:02Like, you know, reminder, life is short. Nothing is guaranteed. But she didn't say how big in De Niro was though, did she? It's overnight. It's nine figures and it's profitable is what she had said. Wow. So it's over a hundred million in revenue and profitable. So she was like, all right, I don't want to run this company anymore. I'm hiring somebody to run that and I'm going to do whatever's most interesting to me. And so her bets were kind of like, she wanted to like, she's like, well you know like what am I like what if I wasn't afraid of failure what would I go do so she had a couple things in the episode I think are going to get lost in there but the big thing that I took away that I went and like basically after every episode I send a voice memo to Ben about like here's the three things that like really like that are my notes from this episode dude I keep my notebook right here but basically the thing I wrote I was like she had like three or four golden questions one of them was what would I do if I wasn't afraid to fail the other one was what was the other one Wasn't it like, what would I do if I was a billionaire?

53:55Yeah, if I had, you know, if I had$500 million in the bank, what would I do with my time? And she had another one, which was, how will I deal with being an absolute beginner? Because if I'm going to go do something new, by definition, I'm going to be a beginner and suck at it. And I know I'm scared of that feeling. And I know that feeling is uncomfortable, especially now that I have a little bit of an ego. I've been on the cover of magazines. People think highly of me. How will I deal with being at the bottom again? And just asking that sort of acknowledges that. And then it kind of takes the power away from like that insecurity.

54:26So I thought she had some like golden questions. And then one of them was like, she's like, yeah, like, cause I was like, dude, you're building these like biotech companies. You're telling me about these technologies that I can barely even understand. Do you even understand these? Like, is this your background? Are you just a science genius? And she was like, no, like I was a C student in biology. Like, you know, and now I have a biology company that's valued over a hundred million dollars. Like there's some irony there. And I was like, you know, so what is it? Are you just like baking until you make it?

54:51or did you like get really good really fast? She's like, well, no, like I partnered with people who are experts and I do the stuff that they're not experts at, like commercializing it. She's like, but also I just started as a beginner. She's like, I literally hired a biology tutor and I started watching podcasts and TED talks and then I would go meet the people and I would ask them like a thousand questions and I would go do research after they answer those and I would ask them 10 more questions after that. I would just keep doing that until like I felt like I had a handle on things. It's amazing.

55:15And I was like, oh, well, it's simple when you say it like that. And so similarly, I don't know about you, but every day I go on Twitter and I see AI magic in my feet. And AI is the best magic trick, like awesome, cool demo product that I've ever seen in my life. It's just like an endless supply of awesome, cool, 10 second demos. I don't know if those will all become big companies, but they're amazing demos. And you did a tutor thing. And so I did a tutor thing. I was like, oh yeah, I should just hire somebody who, because I was like, either I'm going to drop everything that I'm doing and like go learn about AI as a beginner, or I'm just going to sit this one out because I don't know, it's just this fast moving thing that the kids are doing.

55:56And I guess I'll just kind of catch up later. That doesn't feel right either. So I was like, why don't I do this? I was like, I put out a tweet that was like, well, if you're somebody who plays around with all these tools, knows how to use them, I will pay you$500 an hour, whatever, 500 plus an hour to just sit with me a couple times a week and just show me, just teach me about these tools to save me the kind of like 10 hours of fumbling around I would be doing myself. How many emails did you get? I got like over 100 replies from like really interesting people. So it's going to be hard to kind of pick.

56:26I might pick a couple people actually instead of just one because there's so many good ones. And I might publish this. So I'm thinking about creating a side channel. This is like Sean's Playground, my little YouTube channel. Well, I'll actually just publish the call so that even if somebody's not paying$500 an hour for this, they can just get the benefit from it. I don't need to hold this close to my vest or anything. but I think this is great and I want to give myself a little pat on the back but I really want to say it out loud because there's probably a lot of things like this like I know you're taking a finance course right now and that's like the same version that's like the same thing like like don't be afraid to go be a beginner you're supposed to be Sam Parr business podcast sold a business you know you're supposed to be the guy who knows a bunch of stuff and you you came out and you're like I feel like an idiot when it comes to finance like corporate finance I just really don't know what the hell I'm doing.

57:12What's the best course in this place, in this thing I could take? I think you spent like five grand on a course, right? How's that going? Yeah, it's called The Four Day MBA with Keith Cunningham. And yeah, I'm trying to learn how to do all this stuff. Coincidentally, someone did a video, some billionaire guy did a video, and he's like, don't get an MBA, just go take this course. I know, huge endorsement. I saw it when you said I went to the website. Website sucks. And I was like, this sucks. Why did Sam do this? And then I heard that clip and I was like, okay, that's now two people that said this is awesome.

57:39I will now go do this thing. It's a great course. It's a great course. And I think my opinion... How do I say this without sounding like a huge douche? Once I got a little bit of success, I got way less nervous about hiring people to teach me how to do things. Additionally, we talked about a ton. My body tutors and hiring a fitness coach, hiring coaches and things like that changed my perspective of the whole coaching industry, which I used to think was bullshit. No. Having people teach me how to do stuff has changed my life a little bit. And this course is awesome. I have nothing to do with it.

58:18I posted that link and people thought that I... I was like, no, I just think it's cool. It's changed my life, to be honest. Going back to school and learning and having people just teach me things. I think it's going to be really smart for you to do it this way. I also think that if you promote it it will pay for itself so that's always fun but I think you're going to have a life changing next two months if you follow through with this yeah yeah yeah I'm already you know the ROI is baked in into this because of it but I guess like I want to say it because I wouldn't have thought to do this unless Jess Mott she just said that thing in passing like I hired a biology tutor and in my mind I was like tutors are something that end when you're 20 years old there is no more tutoring after that and it's like why why is that the case hold on there's no rule about that um and there's probably other people out there who kind of could do something similar so anyways i said it out loud mostly because if you're the one percent of people that hadn't really thought about this but could benefit from it like do it do you know really what i want to do is what i wanted to do was i wanted to take a like one of those two-week mba courses at columbia or stanford or something like that that was that's my goal for next year to do it and i I went and I looked at the list of topics that they're going to cover.

59:31And I was like, I don't even know what those topics mean. So I got to go take this online one just to prepare for this in-person one. Because I was so embarrassed to see this. And I used to make fun of these people that would put Stanford two-week course. One warning, though. So I took a similar finance thing last year, I think. And it was good. It was a good course. There's nothing wrong with the course. What, you did it in person? No, it's an online thing. But I intended it and I paid attention. Like I was like, if I'm doing this, I'm going to do it. Where'd you do it at? What's cool? It was on Maven.

1:00:02So it was a Maven finance course. And so it was a really good course. There was one thing that I'll say out loud, which is before you go drop thousands of dollars, because, oh, Sam Parr said this course is great. Make sure that you like, to me, the way the analogy is like, these are all clothes on a hanger, but you need a hook to hang things on. And like, if you don't have a hook, the hook would be like a business you're currently running or like a place you can go apply these learnings, then I think they can be kind of like fancy procrastination or just not worth the time or the money. So you have to have enough either battle scars or like a place to go apply these that's actually going to be like relevant for you.

1:00:43Otherwise, it's very easy to just like intellectually sit there and be like, yeah, cool. All right. Well, I hope I keep that in mind one day when this becomes relevant, like you're better off building the business and then learning the things just in time that you need to know when you need to know them versus trying to learn everything in advance and then be like, now I'm prepared to go do the sport of business. Well, the reason I'm doing it is because when I was selling the hustle, this whole thing came at the end called networking capital. And I was like, I just don't know what this means. And I optimized my business in one way, but then I didn't know what this term was.

1:01:17And there was many things that I could have done differently that would have helped. and I felt so emasculated and stupid when these people were talking to me about networking capital. And I'm like, I just can't figure this out when you're explaining it to me. I don't want to experience that pain again. And also, I'm getting my balance sheet and my income statement and cash flow statements every month from my accountant. But I'm like, I don't know if this is good. Accountants typically tell you facts. And I'm like, but I don't know how to interpret it. I need to know how to interpret this to spot strengths and weaknesses.

1:01:45And I just remember when I was selling my company, I'm like, I kind of know how to make it. the money, but I don't know what, I don't know how to optimize any of these equations and I don't know what they mean. And I felt so stupid during that. Um, it was just so challenging to figure out. Can I tell you one lesson I learned from that thing that was probably one thing I remember that I didn't know going in. Um, I just never even thought about, which was the course, I think it's called good business, bad business or something like that. And, um, one of the things it's talking about when you differentiate between a good and bad business financially is your reinvestment runway.

1:02:20So I don't know if you've ever heard this term or thought about this, but it's essentially the idea that every business, let's say, you know, a hundred dollars comes in and you get$20 out of the bottom line, right? You have$20 net profit. What do you do with that net profit? So idiots like us, I think you probably ran your business the way I did. I don't know. It just sits in the bank account. I don't even think about it really. Like, uh, it's there. I hope one day to take this out or maybe I'll use it to spend if we need, if we have some expense or rainy day. I don't know. Let's think, I won't even think about it.

1:02:49And then you start to realize that, okay, the best businesses, they can either reinvest into the business itself so that like when a dollar profit comes out, you can reinvest it back to the top and get more than another dollar out. And so he broke down like some of Warren Buffett's businesses that had no reinvestment potential. So like basically profit comes out and that's why Buffett would take it to the headquarters, the holdco, and just say, the best optimization he could do was when he bought a business, he's like, you're reinvesting capital poorly. I'll take that money. I'll reinvest it in a whole different business.

1:03:22And you will be a little cash cow, but I'm not going to keep investing back for more organic growth into this business. Which in our case would be like, maybe like a course business or maybe even this podcast. This podcast grows mostly organically. We don't need to spend more money in order to grow. Correct. Spending more money is not going to create more money out of this business. The best thing we could do is take the profits from this bad business and invest it in a better business that actually can do that. And so, you know, that was what he talks about is like every business over time, like you start out being able to reinvest, but you had a certain point where a certain dollar threshold where now you can't reinvest more than that into this business at an efficient rate.

1:04:01So you have to identify that point and know that and then you could judge the business based on that. So similarly, the best business like Constellation Software or Berkshire, they're famous for basically taking profits from one bad business, bad defined as like, it's a normal cash cow business, but you're not investing it back in that one. You're investing it to buy another one of those. And you invest that to buy another one of those. By the way, that's the whole point of this book, Good Profit or Profit First. Andrew recommended, I read it this weekend, he recommended the same thing was take money out of the business at least and put it into a different bank account and then redeploy it into your fast-growing business if it warrants it.

1:04:38Or if you have a business that can take the reinvestment, then you know that that business is actually even better than it looks on paper because it has this extra capability that most businesses don't have. Which is what cold punch is, by the way. All of us, I was pretty beginner for anybody in private equity or whatever, but that's not where we came from, right? We were basically dorks on the internet who then started creating internet companies who then tried to get rich off internet companies. And now we're starting to wrap our heads around a lot of the 101 type of concepts. Which, by the way, I think it's better to go that route.

1:05:08I think it's harder to start things from scratch and then learn how to optimize eventually versus you're a good optimizer, but you don't know how to start things from scratch. Just creating the widget that someone wants I think is more challenging. 100%. Plus, it makes me feel good that that's true. But YC did the same thing. He's like, it's going to be easier for me to take badass engineers and teach them the basics of fundraising and hiring and firing than to take an MBA who knows everything about fundraising and hiring and firing, but can't build shit. And that was the core bet of YC was we don't need to start these companies with MBAs.

1:05:40We can start these companies with engineers. It's easy to teach them that. It's impossible to teach the other way. Yeah, and I completely agree with that. And yeah, it makes me feel better that way. So therefore it is true. In summary, we're the best. Yeah, we bragged a lot in this episode. Maybe we'll have another episode where we'll just make fun of each other. No, the comments will do that for us. Here, let me move the microphone so you get a good look. Here's my face. Here's my hair. Here's my body. You can hear my voice. I stutter sometimes. Whatever you got. Go ahead. Hit us in the comments.

1:06:14All right. 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 no days off. On the road, less travel, never looking back.

1:06:30All right. This episode is brought to you by Mercury. They are the finance platform of choice for over 200 ,000 companies. Shouldn't be surprised because I use it myself for not one, not two, but I have eight different Mercury accounts. I have seven for different companies that I'm a part of. And then I have my own personal account because now they have personal banking, which is a really cool feature. I highly, highly recommend it. Like I said, I use it myself. And the reason why is because the way that Mercury works is beautiful. It's very intuitive. And you could tell that it's actually made by a startup founder.

1:06:58It's an entrepreneur. You could tell it's made by somebody who used other banking products in the past. and didn't like all the different rough edges and annoyances and decided to, you know, actually fix it himself. And really any type of entrepreneur you are, let's say you're an agency. Well, one of the things every agency has to do is be able to send invoices, easily create them, send them to customers and stay current on your balances with all your customers. Well, you can do that inside Mercury. And so I think that Mercury is great. Highly recommend you check it out. And thank you for sponsoring the show.

1:07:23For more information, check out mercury.com. Mercury is a financial technology company, not a bank. Check show notes for details.