Native Founder Tells ALL: $100M Portfolio, Investment Strategy & Business Ideas

22:17And you get, you get 92 ,000 that you can go invest in your next property or, or put into tenant improvements that will let you raise rents or something like that. Here's cashflow today upfront. So pipe for real estate. Real estate's a huge market. Why do landlords have to wait to collect the check? No more waiting is our slogan. All right. Now, idea number three, final idea. I did invest in this one. So Steady Capital. So Steady.Capital is their URL. So they were like, hey, look, everybody knows that most millionaires build their wealth through real estate. That is a time-tested approach to wealth building.

22:55Most people actually even want to. They would love to own a rental property and be getting a rent check every month. But most people don't trust themselves to find a property, vet it, buy it, manage it, all of that. And so they were like, we'll do a Robin Hood for real estate type of thing where you just decide how much monthly you want to put into real estate. You say, I'm willing to put away$500 a month into real estate. And they basically let you take the 500 bucks. They'll put it into a real estate project that they are kind of vetting from like proven operators. And then they, every month they'll say, Hey, here's an, you know, you got$112 of, you know, mental income from your property this month.

23:36Yeah. Or you, you now own, you know, pieces of these six properties in six different markets and you're making$600 a month of rental income. Like I put five grand into one deal and I just get this check every month now. And it's actually the first real estate that I've done that I didn't own because otherwise it just stayed on my to-do list. All right. So those are the three ideas. home options, pipe for real estate, and Robin Hood for real estate. Yeah. Yeah. Steady capital. Give me, rank them from your most favorite to your least favorite. Go ahead. Okay. I wasn't like it. I was expecting home options would be number three when you told me about it, but in fact, it's number one, steady capital, and then pipe for real estate.

24:15And I'll tell you why. Pipe for real estate exists, and it's just called a cash out refi. Like, you know, it already exists where you're like, look, I'm getting real, you know, I'm getting money from these tenants and I can take cash out of the property. Like, you know what's not going to happen for Pipe for Real Estate is someone's going to come in and be like, wow, you're 100 % levered up with this debt. Let me also give you more cash. You're already paying for the debt. You know, you're already levered. So I think Pipe for Real Estate exists. And I think, you know, Mark Lohr started this company and he just raised$350 million.

24:47Did you guys read this thing? I'm not entirely sure what it is, but it appears to be like a restaurant delivery business. And so I feel like I'm not sure if this is the case, but it seems like that's sort of like a startup branding to something that kind of exists in this space. I feel like Pipe for Real Estate is the same. Mark bought Blue Apron. Oh, he bought Blue Apron. I knew this sold for$102 million. I didn't know he was the cash behind it. Yeah, he bought it. Yeah, so I think you've nailed it. That sounds like that's what he's doing, but go ahead. Yeah. Yeah. Home options is like, you know, I think the hard part about home options is right now, like particularly in the last week, right now, we don't know what realtor commissions are going to look like in the future.

25:26And you also just don't know how long an option this is. Is the $1 ,200 in the ground today for 20 years or 30 years? That's a really long period of time. I think what he's doing is he's just reselling it right away. Or at least that's what I would do is I would buy the option. I would bundle them up and I would go sell them to the brokerage tomorrow, you know, and just say, hey, you can hold these and, you know, I don't know if the economics all work. I don't know if the brokers are willing to do things like that. But like, I think that's the idea. Yeah, I like it. It's innovative and like different and like, you know, unclear what will happen.

25:58But like, you could revolutionize an industry that, you know, has been the same for the last 150 years. God damn it. Sam's going to be a part of that revolution. It can also be that 6 % drops down to 2 % in the next, you know, three months because, you know, the National Association of Realtors is almost certainly bankrupt at this point. What was the settlement and what's changing about this broker situation? Yeah, it wasn't a settlement. It was$2 billion. I'm not entirely sure what it was. It was like price fixing across realtors, basically saying, hey, you can't be on MLS unless you agree to pay everyone like a 6 % or 5 % brokerage.

26:30Something to that effect. I haven't gotten into the details a bit, but like the judgment was$2 billion. And I read this Wall Street Journal article where once the judgment was had, plaintiff's firms file lawsuits against the National Association of Realizers in every single state. And they're like, we think that we'll get$40 billion in judgments as a result of this, which will certainly bankrupt that organization. Can you talk a little bit about this Founder's Card thing? Because I know you've been tweeting about that for like two years now, and that actually surprised me that you were interested in it.

26:57I feel like there's a club that I'm a part of, like a Founder's Card sort of thing that I'm a part of that I can't talk about the name of it because they would ask me not to. But as a result of paying my$100 a month monthly membership fee, I get a discount that's worth$800 a month to myself. What do you get a discount for? Just SaaS software that I really want, that I have to pay for. But do you have to be a new... A lot of those cards, you have to be a new customer. No, this one you don't, yeah. Wow. You just pay$100 a month and they're like, here's discounts to like, let's say MailChimp and let's say Shopify and like all these other SaaS platforms that an e-commerce company might want to be a part of or might want discounts too.

27:38And so then you go and say, great, I paid$100. I get all these discounts and I'm gonna go use those discounts for my business. And so you never are gonna cancel that$100 a month subscription because that$100 is actually saving you$1 ,000 a month. And I don't understand why there aren't more of these for smaller niche industries. And I think like e-commerce is a great one. Like, you know what P &G does? They go to Snapchat and Pinterest and Facebook and they say, look, we're going to spend$250 million across our portfolio on your platform, but we need a discount because we're spending so much money.

28:16And they get that discount. They get it from Facebook for sure, because I've seen it. I'm pretty sure Pinterest and I'm pretty sure Snapchat. But I guarantee you they get a discount for Facebook because I've seen it. I saw it when I was running Native as a part of P &G. And so I'm not sure why smaller businesses don't organize and say, look, we're spending this much. Let us also try and negotiate discounts with platforms. Why don't we all negotiate a discount with Yopo or with Otendo or with PostScript or with Klaviyo and say, look, there's going to be 400 of us together. A lot of us are going to use this software, but we need a big discount.

28:48That's a lifetime. It's like a lifetime monthly recurring discount. And so, sorry, you have one of these. This is not an idea. You're saying you have one of these cards, but you're saying it's like a secret, but they don't want more people to have the card or what? Correct. They would not want me to talk about who they are. But yes, as a result, I get discounts to software that I wouldn't get otherwise. And it costs me$100 or$140 a month. Why don't they want to talk about it? Yeah, great question. I'm not entirely sure, but I'm sure they would tell me not to talk about it. You think it won't be$100 a month?

29:18Well, like there's... Yeah, wouldn't they want more customers? Some Spidey sense is going off here. You know, like what's going on? Why? I mean, is this a shady thing? Sam, this was your idea. Not your idea originally, but Sam told me, I don't know, seven years ago when you were running the hustle, you were like, I'm trying to think of a new product. And you had three ideas. And I remember one of them was basically trends, which is the thing you ended up launching. Another one was this idea for the Founders Club card or whatever, which was, I think you were comparing it to the AARP. You're like AARP for kind of like millennials or founders or something.

29:57And I can talk about AARP in a second, but yeah. That was the second one. What was the third one? You had one more. I don't remember that third one. And I thought the card was the best idea. I was like, oh, you should for sure do this card if I had this. And in fact, actually now I'm just going to do the card off of the MFM audience because I'm like, this is way better and it's a win-win. I might be a few months ahead of you. Why didn't you do that card? The reason why I didn't was I couldn't find, I couldn't figure out entirely how to differentiate from all the other offerings that already existed.

30:28It was also quite challenging to get in with some of the brands in order to negotiate bulk deals. The argument being, well, you know, these companies already spend with us. Why am I going to give them a discount? And I couldn't come up with like the perfect rebuttal for that. And that like, that is where I was trying to figure out how to make it happen. And what is the rebuttal to that? the rebuttal for that is your competitors are offering it right so you basically have to go get the number two yes of every space and say hey we can move you some customers if you make this attractive and then you go back to number one you say hey number two is offering this and their people are moving um you should match it yeah and like new people who get in are going to use number two instead of number one because they get the discount exactly exactly and we we continue to have new customers and we're just going to keep telling them go with this company because they offer a benefit.

31:18And the reason why I was interested in it is AARP. So AARP, I actually don't know what it stands for, but it's a club for people above 60 or 50. I think 50. American Association of Retired Persons. Yeah, so I guess it's 60. They do about one and a half to$2 billion a year in sales. And they have millions and millions and millions and millions of members. The way they make business revenue is, I think they only charge about$100 a year to be a member. And like most everyone, when you turn 60, you get an invitation in your mail. And what you do is you get discounted health insurance. And they make another side of their business is making money.

31:55It's basically an affiliate feed. So I think they parted with UnitedHealth. And they have the UnitedHealth AARP plan, which is a discounted plan, but also a plan specifically for whatever 60 plus people have. And they are, I think, one of the largest lobbying groups in America. It's a huge lobbying group. They basically shaped the government in some regard. And so I thought that was super fascinating. It's a really fascinating company that's existed for decades. And is it going to go away anytime soon? And there's already other businesses doing this. Think about Y Combinator. When you get into Y Combinator, I think you get$250 ,000 of AWS credits.

32:30You get a bunch of straight processing charges for free. And those businesses are like, you're going to grow. We're going to make money at the end. But it also makes it like, you know, when Y Combinator is selling you on giving$120 ,000 for 7%, they're also like, here are the other benefits that you get in this business. Right. So anyway, I'm on board with this. Do you want to do one more? Yeah. What's the other idea? You had something around Shopify for high-end or something for high-end D2C. What was that idea? Yeah, sure. You know, Shopify is fantastic. I'm a big shareholder in Shopify. I loved them.

33:00You know, I built my career on e-commerce. The reality is it's wonderful for businesses going from zero to$50 million. It's awful for businesses. It's not awful, but it's not good for businesses north of$100 million that are ready to spend a lot more on improving their conversion rate on a custom checkout page. And if the Shopify people were here, if the Shopify people were on this podcast with me, they'd say, that's crazy. We have big businesses like Faze and Allbirds and a lot of other big businesses on it. But the reality is there's so many lack. Look, you can't customize so much, and it's so difficult, particularly on the checkout page, that I think there is room for somebody to come in and say, I'm going to build Shopify, but for businesses doing north of$100 billion.

33:42And there's a lot of businesses doing north of$100 billion that have left Shopify, you know, away travel, ritual vitamins, because they're like, look, we've outgrown this platform. Where did they go? Probably like usually a custom built stack, sometimes with like this backbone of an old brand, of an old business called Spree, which I think was like this open source e-commerce platform when you were growing your business, but I don't think it's around anymore. But I'm like, you know, they'll often go to their own custom tech platform because they're like, look, we're doing enough business that this makes sense.

34:08Which is a pain in the ass. It is a pain in the ass, but like, you know, a pain in the ass is worth it when you're doing$500 million in revenue and a quarter percentage point bump in conversion rate on your checkout page is going to lead to an extra$10,$20 million in revenue. It's completely worth it then. And Shopify's one-page checkout, they launched that in the last six months. That's been something that people have wanted for a really long time. Shopify subscriptions has been really bad. All the subscription platforms have been really bad until more recently. So I think Shopify is trying to catch up on that larger segment, but I think they've done a lot of that.

34:44That's not their focus. Their focus is you've decided you want to start a business. You go in the shower, you come downstairs and you start a Shopify store, that business is doing$100 million in revenue. You know, there are solutions that are competitive or more competitive than Shopify is. And they're worth it because small changes in your website are going to be worth so much and are harder to do in Shopify than they are to do in other brands. Yeah. Candidly, like, you know, Native was a$50 million e-commerce business built on WordPress. And the reason we did WordPress was because it was cheap, way cheaper.

35:13And because it allowed us a lot more customization. We could do post-purchase pop-ups and add-to-car pop-ups at a time where you couldn't do on Shopify. We could do subscriptions that didn't charge us and aren't allowed to have subscriptions that you still can't do on Shopify. You know, we could have our own servers, which, you know, you may or may not want based on Shopify. We could do instantaneous page loading, which you couldn't do on Shopify. And so there were a lot of benefits for a business because it was open source versus Shopify. Yeah, you use the$300 a year WooCommerce, which is like the steal of the century and the miss of the century for WordPress.

35:44Yeah, it's not$300. It's free. Is it free? I used it too. Yeah, you know all those features that he just said were benefits? That's not why he did it, to be clear. He picked it because he was like,$3 ,000 for Shopify? Outrageous, over my dead body. I would rather this business fail than pay you$3 ,000. I had a business that was doing millions a year, and we used WooCommerce. And I remember it's owned by WordPress now, I think. And I remember looking at WordPress's revenue. I'm like, okay, so WordPress controls a third of the internet, and Shopify makes this much money. and yet they're giving this to me?

36:19What a bunch of idiots. You guys, like, it's a massive missed opportunity for WordPress. And WooCommerce is great. You just need a developer sometimes to help you do some stuff. But it's still way cheaper than Shopify. That's right. But I'm like, really, it just goes to do, like, you know, we did a post-purchase pop-up at Native, which was after you clicked checkout, we showed you a pop-up saying, buy travel-sized deodorant. We probably sold$700 ,000 of those travel-sized deodorants every single month and made, you know, $400 ,000 in net profit off those travel-sized deodorants. And we could only do that in WordPress.

36:49We could not do that in Shopify. You also had something you were like, I would do Shopify apps for India or something. And I found this interesting because our Shopify app bill, now granted, I could go through and prune some apps that we're not using anymore that are probably still just recurringly charging me. But I think we spend like 10 grand a month on Shopify add-ons. Do you really? It's insane. Because whatever you want to do, they're like, oh, would you like to collect email addresses? Pay me$1 ,500 a month for this pop-up? What are you talking about? And they're like, well, your store is big.

37:24And it's like, that doesn't matter. This is an email pop-up. What do you care how many people type into the form? Google Forms is free. What are you talking about? And every little thing, we added a post-purchase upsell, and it was like$900 a month. And it was like, what's happening? Why would this be so expensive? All the review platforms are crazy expensive. Shopify apps are an absolute ripoff in the pricing. Definitely. And I think that if I were a developer in India, I'd be like, I'm going to hire a team of you guys. We're going to knock off every single app and we're going to charge$20 a month.

37:58And that's going to be our entire business model is$20 a month. And the other thing I'd say is the more apps you use, the cheaper it gets. So if you're using Fiber apps, instead of paying$100, you're paying$75. dollars. There is no reason that Just Uno pop-ups should be$1 ,500 a month. There's no reason that a post-purchase upsell should be a percentage of revenue and not$30 a month. And the reality is that everyone's tiered percentages of revenue because you can make so much money doing that. And this is software that could have been written within a week or a week and a half by almost anybody and should be$30 a month.

38:33I talked to a guy, I tried to buy this one Shopify app, that all it did was it added a maximum to your cart. Like a feature people don't even think it's like, why would I ever stop someone from buying more? And it's like, let's say you're doing like a limited edition thing. You don't want like the resellers to go buy all your shit. And these guys, for like seven years, they've been doing like$2 million a year with a million and a half dollars of profit just on one Shopify app that just caps the maximum somebody could buy of a unit. and that's got to be like, you know, that should be like two lines of code or something.

39:10It's crazy, but there are so many of these that exist out there, and people have smartly tried to roll some of these up. Yeah, and how many of those, how many of the customers of that app are probably customers who don't look at their bill on a monthly basis, and they're like, oh man, I'm getting charged$200 a month and I never think about it. Yeah, yeah, because it's built, first you never whip out your credit card. You just, once you connect to Shopify, it's going to pay you through Shopify. Yeah. And then it's buried in the billing tab under all this stuff. So yeah, there's definitely, there's like low, very low friction in like racking up those charges.

39:41There's a massive business to be built here, which is cloning the top 100 Shopify apps and just charging a flat fee. Like, you know, it might be a longer term business because you don't have a sales team and you're not going out calling everyone being like, switch from, you know, Yapo to me. But it is every single new business is going to go to you because it's way easier to use. Hey, quick message here, because you know that feeling when you send a wire and it actually works? No friction? Well, I've used Mercury for years now and let me tell you, it just works. And that's why I use it for not one, not two, but eight of my companies.

40:13From credit cards to invoices, I have everything in one place. There's no janky dashboard. I'm never told, please visit a local bank branch. None of that tomfoolery. And a few months ago, I landed a big client. And the first thing I did, I sent them a clean branded invoice. Boom, deal closed, cash in the door. That's the kind of banking experience I want. And that's why I use Mercury. So if you're running a startup and you want banking that feels like it's built in this century, well, go to Mercury.com and get started in minutes. Mercury is a financial technology company, not a bank. Bankless services are provided through Choice Financial Group, Column A, and Evolve Bank & Trust members FDIC.

40:47You have some controversial opinions. You have a lot of them. A few of them. Data is overrated. Wealth managers are just used car salesmen. You hate Twitter real estate. I want to hear some of your thoughts on those things. We'll start with an easy one of data being overrated. What do you mean by that? Let's start with an easier one, which is Twitter real estate, if you don't mind. Wait, say the unpopular opinion. What is it about Twitter real estate? It's full of complete shit. They're full of frauds. I can't begin to tell you how many people where I read their tweets, some deals I'm in, and I'm like, how is nobody calling you out on this?

41:27People are like, are you on call? Give the listener perspective here. So you own maybe dozens or a hundred? Hundreds. Hundreds of either single family homes or multifamily homes. Is that right? That's right. Yeah. And then I'm an investor in dozens of real estate deals as being an LP. Okay. So that's your perspective. That's my perspective. I'm an LP and a lot of the people, people will be like, did you unfollow me because of my opinion on the Middle East crisis? And I'm like, no, I unfollowed you because you're a fraud and you're pretending like you're a good real estate investor and you're a fucking complete criminal and i know it because i'm an lp in your business i get like you know even now i can feel my blood boiling they're tweeting out they're tweeting out their returns they're like here are returns and i'm like these are not returns that i've realized as an lp in your deal as an lp in your businesses and you know they have the audacity like you know i'll be like hey uh we're like you know before interest rates were going up i was like we have floating rate mortgages what the fuck is going to happen when interest rates go up and these guys are like, oh, it's going to be fine.

42:27It's going to be fine. And now they're like, actually, we need more money. And like, you know, startups are one thing where you might need more capital as the business grows because you're trying to expand for some reason or another. Real estate is a business where once you own the asset, you should not need more cash. You're not like expanding the real estate anyway. You're operating an apartment building. The problem is what happens is when the interest rates go up and you have more debt to pay every single month because you're on a floating rate, you need more capital to be able to pay that debt because the rents don't service it.

42:54rents are going down, interest rates are going up. And these guys who have promised, you know, making fortunes are like are caught with their pants down. And then what they eat, which is crazy. Then they have the audacity to say, hey, actually, our returns are fantastic. And then the other audacity that they have is they're like, OK, all the deals you invested in within the last five years with us are bad because interest rates are up. But now we can buy things at a lower price because prices have gone down, their interest rates are up. So buy with me. Now I'm a good, now it's a good time to invest with me.

43:24And I want to be like, I want to fucking kill you is really the answer. Um, like I, you know, I hate that type of bullshit. You said, why isn't anyone calling these people out? Um, why aren't you calling them out? Would you like to name some names? We've got a great audience here that would love to hear the names of some of these folks. Yeah. I don't want to name names because I want that. Like, you know, some of these people I'm friends with, and I'm like, I know your wives and your families, and I don't want you to like suffer. I was like, I don't want to see you as sort of suffering in that way.

43:52You just want to kill them. But like, yes, I do want to kill them. I do think that like, there are very few people I would ever invest again with in real estate Twitter. The one exception to that rule, I'll name the exception rather than the rule itself, is Moses Kagan, where I've invested in several deals with him. And I'm like, this guy underwrites conservatively like I underwrite. And he's like thinking about the game in a long-term way where he's like, I want to manage my reputation. I want people to make money. I'll make money when people make money. And I would invest with him again. And a lot of other deals that I've done with people on real estate Twitter, I'm like, I would need, you know, I'd have to be a heroin addict to invest with you again.

44:31You said last time you were on the podcast, you did a pie chart, which normally people do as percentages and you did as dollars, which I thought was such a boss move and really enjoyed. So I want you to tell me how it's changed since then. So you said at the time, this was 2022. to mid-2022. So it's been about a year since then, a little more than a year. You said, I got$10 million in private equity, $40 to$50 million in cash, which is short-term bonds. I'm waiting for bond prices to come up, you said. That was so smart. Then you said $25-30 million in real estate that we own and operate ourselves, and then$10 million in real estate as an LP in other people's funds.

45:12You said$10 million in startup investments and$10 million in the stock market. What do you... Has that changed? Have you made shifts since then in how you are investing? And we should put that in a pie chart on YouTube just so people can follow that easier. Yeah, sure. Good question. It hasn't changed dramatically. I would say the$40 to$50 million in bonds is probably somewhere at$60 to$70 today, but it's still in short-term bonds, which are yielding a lot. I'm starting to get a little bit longer as the yield curve starts to flatten. Like right now, if you buy a one-year bond, you'll get about 5.5 % interest in a year.

45:50If you buy a 10-year bond, it's a little bit under five. You know, a year ago, it was like five, it was, let's say, 5 % for a year, but 4 % for 10 years. And now, like the curve was inverted, and now it's starting to flatten a little bit. And as it continues to flatten, I invest in longer-term bonds rather than just short-term bonds. I probably have$15 to$20 million in the stock market at this point, heavily concentrated in Facebook and Shopify. Probably like, and probably PMG. You tweeted out this funny thing. It was your IRR versus S &P. And you're like, you quoted Legally Blonde. You're like, what?

46:28Like stock investing is hard. It's hard. Yeah, that's right. And what was the returns? What was the comparison? Yeah, it's probably up 30 % for the error. Yeah, versus S &P was like three or something. 10, 12 or something like that. Yeah. but you didn't say what you owned and in my head I was like I bet that is literally just Facebook it's a lot of Facebook Facebook and Shopify and you and your brother kept buying the dip like Facebook was getting crushed like you know yeah I don't know a year and a half ago to like up until six months ago or something and every time it went down I remember your brother and I think you also were like hey is everybody insane great wait, I can't wait to go buy more Facebook today.

47:14And psychologically, it's hard, right? Earnings come out or a big stock move happens, goes down, and to be like, all right, woo, let's go. But let's buy in more, buy in more. That takes a totally different mindset. What drives the conviction? Because it's obviously not a reaction to the, you're not reacting to momentum. In fact, you're going, you're betting against the current momentum. So what made you believe that that's like a place that you wanted to be investing? I would say two things. One is literally every single business I know, if it's an online retailer, is entirely dependent on Facebook, whether they realize it or not.

47:52Like anybody, like the best businesses in direct to consumer are entirely dependent on Facebook. The worst businesses are diversified. And it's that simple. If you're entirely, if you're like my business lives or dies by Facebook, I'm like, you're going to have a better outcome than if you think your business lives and dies by YouTube ads. Brick and More, actually Brick and More is an exception to that, but like YouTube ads. I'm diversified with my advertising strategy. I'm investing a lot in TikTok. That means you can't get the thing that works for everybody and is the biggest advertising engine in the world to work for you.

48:21You're going to miss out on a ton of opportunity. And so I'd say that is one of them. But like the reality is, and this is a little bit of a longer story, when the financial crisis hit, my father, who had been conservative his entire life, he was probably like 70 years old at the time. And he's like, this doesn't make sense how cheap these houses are. And so he bought one house and it was probably like a 1500 square foot house and he paid $150 ,000 for it. And it just sold for like$225 ,000, like, you know, a couple of months before. And he's like, there's a$75 ,000 discount after 60 days. And then 60 days later, that$150 ,000 was probably worth like$75 ,000.

48:59And rather than get scared and be like, oh, fuck, I lost$75 ,000 and we don't have a lot of money at that time. He's like, this doesn't make any sense. Now this house over a year that sold for$250 ,000 four months ago is for$75 ,000. And so he kept purchasing real estate. And there was one half duplex that he purchased for$8 ,000, and it generates like$1 ,900 in rent a month today. Within a year, we purchased back the entire duplex every single year. And he never lost conviction. He's like, this is a deal of a lifetime. And I've got the conviction that I'm right here. And honestly, people talk about my brother and I and how we've had financial success.

49:39The reality is that financial success is based on the idea that we will not need a lot of money in the future because he started purchasing real estate and created a steady stream of income for our family that would be very hard to lose. We had the benefit of that. It's sort of the solid foundation of not worrying about money and sort of being able to take a lot of risk because we could fall back on real estate. And that gave me a lot of conviction where I'm like, wow, it is possible to buck the trend here and say, you know what? These people are wrong. This is on sale. You're selling this incredible asset and it's 50 % off.

50:11And I know it because I'm looking at 25 ad accounts on a daily basis and seeing that these people are still investing ad dollars on Facebook. So how could it be 25 % off? How could Facebook stock be 50 % off? This is a buying opportunity, need, not a selling opportunity. Of your portfolio now, what percentage of it came from native? Did native make up the bulk of it and then it's just grown nicely since then? I would say native is, you know, it's hard to answer that question because like a lot of these, so when native sold, let's say I made virtually the entire amount, but that, you know, like the, my net worth is significantly higher than that now, but like, you know, it's based on like, I wouldn't own$50 million in bonds were it not for the$100 million I got from Native sale.

50:58So yeah, while the interest is—I don't know if the interest is attributable to Native, or it is not. Presumably, it is. Certainly, if I were getting a divorce and I didn't have a prenup, I'd say, all of this is Native money. It all came from Native. That's pre-marriage. And so the bulk of my financial net worth is a result of selling a Native. But at this point, the cash itself from native is probably less than a majority of my network. When you talk about like, oh wait, your dad saw that opportunity underpriced when Facebook stock is crashing, you feel like this is an underpriced asset. What do you feel like are the kind of underpriced opportunities or assets today?

51:40I think San Francisco real estate and possibly office real estate in a lot of other cities. But I do think that like that, you know, the question is, how do you want to get in there? And when we were when my father was buying this real estate in 08, I was an attorney. It must have been like a little bit later. Actually, must have been like 2010. I was an attorney and all these like wealth managers try and talk to attorneys. And so I was like, look, I need a loan for 500. My family needs a loan for five hundred thousand dollars. We bought a million dollars of real estate. We just want 50 percent LTV.

52:09And Wells Fargo would be like, the only way we're going to give you a loan is if you give us a million dollars in cash, then we'll give you a million dollar loan. And I was like, I don't understand if you guys know how money works. But if I had a million dollars in cash, I wouldn't come to you for a fucking million dollar loan. I wouldn't give you that. So anyway, we were strapped for cash and trying to deploy it. And what my father did is he dollar cost average into the real estate. And he didn't know that that's what he was doing. He was just like, OK, we got another$50 ,000 to spend. Let's go buy a house.

52:38and he would get that$50 ,000 for rent that he was collecting. And so he just dollar cost averaged his way in and it was really aggressive. If you were dollar cost averaging your way into office space, I'd probably start in 2023 or very early 2024. If you were like, I'm trying to time the bottom, which is really hard to do correctly, obviously, I'd probably still wait four to five months because there are probably still some deals that have to go, that have to light on fire before the rest of the world realizes, okay, my real estate is now worth$100 billion. It's actually worth$30 million today.

53:14Yeah, I agree with the San Francisco thing. What do you think? What was your answer to that question? I didn't have an answer, but I wanted to know your opinion on some of these DTC companies that have just gotten smashed in the stock market. So like an Allbirds brand, which I don't know what the market cap is, was like$50 million or something. It's come down. I'm way, way, way down. Revenue is over$100 million. Market cap, you know,$50 million. Today is 138. Yeah. No, I think it has to go bankrupt before you can touch that. And why is that? They just totally mismanaged it or it's too much debt?

53:43What's the problem with that business? I haven't looked at it. Probably like real estate is probably not good. Their team is too large. They might have some financial obligations probably to their suppliers that are really holding down their, they have a lot of accounts payable. And you need to wipe that all out before you can get into it. I looked at this with Honest as well. And I was like, I talked to some serious people and I was like, hey, I want to buy, I'm thinking about buying Honest. and that business had different problems. That business had gross margin problems, which was if they sell a diaper for a dollar, it actually cost them 70 cents, and generally in this industry, it actually cost you like 30 cents.

54:20You should have 60, 70 % gross margins. These guys had 30 % gross margins. So they had a different problem, but I think with Allbirds, it's more severe. It's systemic. It's a brand. And like, you know, it's a brand, like, I think it'll have to go through bankruptcy and it'll be fixed. Do you look at things like AI? Do you pay attention to it? Or are you just like, I'm a merchant. I used to cash checks at a gas station and then I sold deodorant, you know, through Facebook ads. And now, you know, I, you know, are you like real estate, you know, the only things I can touch and feel? Or do you pay attention?

54:56Do you get swept up at all in the kind of the crazes of the day? like AI? I think I get swept up a little bit, but I'm probably more cautious where I'm like, I want to see how this thing makes money. I remember our last podcast, Sean, you were like, how much do you have in a Bitcoin? Because that was one thing on my pie chart I did not talk about. And I was like, you know, probably less than$500 ,000. And today it's, you know, probably less than$200 ,000. You know, I'd like to know how I'm going to make money. I guess I'm far more risk averse than most entrepreneurs. And that risk aversion means that I probably won't invest in businesses unless I have a good idea of like, how does this business make money or who purchases this business or how do we exit this business five to 10 years from now?

55:39I need like a realistic vision of that. If I don't have that, I'm probably less inclined to get behind it. And so I think that's made me shy away from Bitcoin. That's made me shy away from AI, probably to my own detriment. Are you managing everything yourself? And what tools are you using? Is it just a sheet? Just an Excel sheet? Yeah, there's a Google sheet my brother and I share where we're like, here's your investment. Here's a fund. Here's how much we've committed. Here's how much we've invested. If it's a startup, it's here's how much we put in. Do you guys still have one bank account? He told me once, he was like, yeah, it's kind of just like a family pot of money.

56:09I'm like, how is that? A little bit. A little bit. A little bit, yes. The honest answer is yes. Still, in very many ways, I think the answer is yes to that. When you see him buying something stupid, you're like, you're spending our money, bitch what are you doing well i knew he was going to buy you a gift one time and i was like well he's kind of buying himself a gift right you if it's our money uh you you don't like you don't like wealth managers uh so do you manage everything yourself because that's a full-time job almost that is a full-time job if you want to be good at it and if you don't get like if you don't want to be good at it it's less of a full-time job like at this point i'm i'm mostly content with if i'm not making a startup investment, I'm generally going to think of the S &P 500 or the US Treasury.

56:54I'm not chasing the extra yield where I'm like, if I put a lot of effort into this, instead of the US Treasury, maybe Uber bonds that are dated in 2025 are paying 6.2%. But you have to analyze what's the tax implication of this Uber bond versus a US Treasury to determine net yields. I'm not like that. I'm just like, give me the US Treasury. The extra 1 % yield isn't worth it. I'll go make a percent elsewhere. My wealth managers, I've been through several now. I've been through Goldman Sachs. Goldman Sachs, you know, like Goldman Sachs is like, always consult us before you make an investment. We'll just give you our real opinion.

57:33And I did that for a while. And I was like, OK, I thought you guys were just going to be like, is this a good idea or a bad idea? But they're always like, no, give us the money instead. I used to tell the story. I told I went to my Goldman Sachs' like my wealth manager's boss. I had her come over to the native offices and I was like, look, I believe that if I told my wealth manager that Bill Gates was ready to give you a billion dollars tomorrow if I let him borrow this pen and he signed a contract to that effect and put the billion dollars in a briefcase and give me the briefcase, you'd say, don't do that deal.

58:04Give us the pen instead. They would not let you loan a dollar to Bill Gates if he was going to give you a billion dollars tomorrow and he pre-funded the billion dollars. They said, give us the dollar. We can do better with it. Let us earn fees on your dollar. Don't take the billion dollars. Let us earn fees. And I told my Goldman Sachs wealth manager's boss, I was like, this is how I feel at your organization. It is fucking horrific. And, you know, I still feel that way about them. Like, you know, I'm still angry at them. And then I went to this - Tell me how you really feel. Yeah, yeah. I'll tell them.

58:37You know, she was like, wow, that must be awful. And I was like, yeah. And I was like, if I had people working for me that made my clients go like that, that made my customers go like that, I'd want to know. And that's why I'm telling you today. Phil, one of the funniest tweets I ever saw was you go, oh, here's a photo of every 3PL owner that I've ever seen. And it was a picture of the Hamburglar. It was so funny. It was so funny. Oh, my God. And I couldn't even imagine what you were going through that would get you to the point where you're like, I'm going to tweet this out. And where's a picture of the Hamburglar?

59:15Because that's how clownishly criminal these guys are with how they rip you off. It's so true. That was so funny. My last wealth manager was like, about a year and a half ago, was like, you should invest everything into bonds right now. We think the Fed is going to engineer a soft landing and everything's going to be perfect. And so you walk this through. You'll get a 3 % yield if you invest in a five-year duration. So basically, you'll get 3 % a year, but you have to commit to that money being invested for five years. And so I put like, I think it was like$5 or$7 million to that against that strategy.

59:51And then a quarter in, like probably three months later, I was like, you know what? I don't believe in this. Sell everything right now. I'm going to take a loss. I don't think we're going to engineer this soft landing. Interest rates are going to go up. Inflation is 9%. What the fuck are you guys thinking that we could engineer a soft landing here? with interest rates staying the same, interest rates remaining the way they are, and inflation being nine fucking percent, you think that I should get a three percent yield? And so we sold the$7 million. I probably lost$125 ,000 or$150 ,000 in that three-month period doing this.

1:00:23Three months, lost$150 ,000 because I bet against them, and people started to realize interest rates would rise. And since then, I've just invested in three-month, six-month, one-year treasuries to take advantage of the yield. And so like, you know, the guys who are the wealth managers, their job is not to understand markets. Their job is to understand how to sell you an asset. They're just car salesmen who sell like, you know, financial instruments rather than cars. And they're like just as sleazy and just as like slimy and just as charismatic as well. And, you know, I trust, you know, have you seen like Seinfeld where George Costanza is in a car dealership and a car dealer is like walking towards him and he's like, stop right there or otherwise I'm going to leave.

1:01:08That's whenever my wealth manager is like, let me sell you this asset. I'm like, stop right there. I'm going to hang up the phone. If we continue this conversation, VOO or U.S. Treasuries, don't try and sell me anything else. I know how you guys think. One time they were also like, we're a very large LP in Forerunner Ventures. And I was like, look, I understand direct to consumer better than a lot of other people, Forerunner invest a lot of direct-to-consumer. You guys are wearing that as a point of pride. I think that's a terrible idea. Don't put any of my money in Forerunner ventures. And so it's been a fun learning experience, but it's also something where I'm like, there's no one doing this well.

1:01:45At least no one that I found that does this well. Everyone seems to be like, here's this product. We want you to fit into this box. Put in this much money in private equity, this much money in venture capital, this much money in bonds, this much money in hedge funds. We don't give a fuck about your, like, you know, we'll think about your age and that's it, but that's about it. But we won't be sophisticated about this and be like, okay, you know what? Maybe you want esoteric assets that are more interesting. Maybe you're okay with your money being tied up for longer. Really, like, they don't understand the market.

1:02:13I think that's a more fundamental problem. They're not like, we think the market is heading this way and we want to prepare you for that. Even in times of uncertainty, they're not like, we want to prepare you for uncertainty. Are you ever going to start another company again and make that your thing? You missing it? Yes, definitely. You know, I think that I can't turn$100 million into a billion dollars. I can only start a business that sells for a billion dollars. So I think the answer is yes. In fact, I'm certain. What happened to the guy on Twitter who said, hey, money's not going to make you happy.

1:02:43It's your friend and your family and your... What did you say? You had some tweet about this the other day that I was like, do you hire a ghostwriter? Who is this? This is not on brand. This is not the guy who said, I was put on earth to increase earnings per share. I like the old boys. The guy who was like, it all can be true. It all can be true. Right. You can, he wants to get after it. You don't have to do it just to make you happy. You do it just because it's exciting. And I think like, it all depends on the mood you're in where you're like lonely or spending a lot of time with friends. And you're like, wow, this is great.

1:03:11And then you, you know, I'll spend time with friends. And this guy will be like, yeah, I'm making, I started this direct to consumer business. I'm doing a hundred million dollars. It's our second year, $20 million. And I'm like, fuck friendship. I need to get that. and so I think it's all like the grass is always greener um and so sometimes I'm in the like you know I had this other two where I'm like sometimes I want to be like a warrior and make a lot of money and other times I want to be like a civilian and um just spend time with loved ones I don't have a good answer to that I see a therapist and she doesn't have a good answer to that for me either hey no there's uh what is it Sun Tzu it's better to be a warrior in the garden as opposed to a gardener and more so uh you know you could still be this crazy person and chill every once Wow.

1:03:54That is a great quote. I've never heard that before. That's awesome. What are business ideas that you guys have? What's a business idea that I should start? You know, if I want to start a business, what's what you guys talk to a lot more people than I do. What's a business idea I should start? Well, my honest opinion is that you now have new advantages. And so like you could start a new business from scratch, but I really do think the thing you should do is take a huge slug of capital, buy something that is already worth $100 million. You could take something from$100 to$500 or$100 to$1 billion much easier than going from$0 to$500 with a new product in the marketplace.

1:04:35I think that's where I would start the process of thinking. I think you'd be very successful doing that or buying I forget the guy's name, Nat something, the guy who bought the trading car company. like an old... What was it called, Sean? Yeah. Nat Turner? Is that his name? Nat Turner. Yeah, he bought a trading car company. And he's like, I'm going to make this cool again. I think you would succeed doing that. But my read on you is that you are significantly more of a creator and an artist than you want people to think. And I think that you have to... Because I saw how careful you were about customer service and about the brand.

1:05:08And even though you want to act like this tough guy, you were like, I'm going to answer 200 customer service emails and I'm going to delight them. and I remember about the website, like you act like, oh, I just copied this, I copied that. There's a lot more thought and care than you give that vibe out. And so if I had to tell you what to do, it would be start something from scratch and make it art and then also have that 50 % of you that only cares about Evita or whatever. But my opinion is of who you are is you need to be a little bit more of an artist than you have lately. I couldn't agree more.

1:05:44I appreciate that. Yeah, I actually agree with that. I also think what I would not do is I would not do another DTC brand, even though you know how to do it and you could do it in your sleep at this point just because you're playing the same level of the video game that you already beat. And what's more valuable than the money you would make in that is you have a certain number of years of you're in peak mental, physical abilities right now and use those years wisely. Either go do just the funnest things you can think of around the world and travel and do all that good stuff. Or if you are going to do a creative project, make it one that like, you know, puts those to good use and to good challenge.

1:06:24You know, like if you came to me and you said like, you know, I'm starting another DTC brand and it's going to be, you know, not deodorant, but whatever, some other thing, you know. Yeah, I would be like, okay, that's cool. I'm sure it's going to be successful, but I don't think that's what will make you more successful. Yeah, but that's bullshit because native deodorant I use the soap because I trust the brand. He built a brand. I mean, it's a trusted brand. Partially because I know Moyes. I don't know the owner now. So I don't know actually if they're sticking to what the promise. You don't know Proctor?

1:06:57Well, I don't know if there is. Actually, it's the opposite. I think if they own it, they're probably going to ruin it. But if you were to create some type of food that is a healthy option or something baby formula, that's a healthy option. I actually think that that would start and look silly, but it actually has massive implications and would make, I don't like saying this, but it could make the world even a slightly better place. And you could find some fulfillment in that. And it would look just like another e-com brand. But as long as it's not something stupid that doesn't matter to people, like, for example, another Allbirds thing, but something that I put in my body or something that makes my kid healthier, something like that, I think that could fulfill you.

1:07:36I appreciate that. And I appreciate that inspiration as well. I think there's truth to both those things. I want to build something. Like one of the reasons that I haven't really gotten excited about anything is because I want something to be, you know, 10 times bigger than my last business. And that's, you know, that's hard to do and hard to be excited about and hard to say, you know what, I'm going to spend the next 10 years of my life building this business. And that's, you know, that's what's made me really cautious about it. But in a way that I think is, you know, making my mind less flexible than it was five years ago.

1:08:06Well, you better get on it, man. You don't want to be a has-been or a one-hit wonder. Tell me about it. I think that Native is only, it's a home run for everyone else. I think it's a base hit for you. But I'm like, every day I'm like, what's he doing? What's he doing? Is he doing it? I'll see you tweet something. I'm like, is that going to be the thing? Is that going to be the thing? Is he going to actually call in? You know, you're going to be like Uncle Rico bragging about how you almost took state in high school. Like, you know what I mean? That's right. What a nag. What an amazing nag. Well, hey, look.

1:08:34That's great. It's not a nag. I'm saying, you know. It's a compliment. It's a compliment. Look, it's a compliment. that you're gonna you're gonna do great things but whether you're gonna finally nut up and actually do it uh and that's what i'm eager for yeah yeah in fact my heart or my banker from uh the native sale texted me yesterday and he's like you know november 8th is the six-year anniversary of the sale and so like it's been six years since i've been uh you know sold the business and you know i think so far it's been my badminton opus hey boys you want to feel some anxiety today It's been six years.

1:09:07You want to fuck up your day? There you go. You know what that is, Gabe? He's doing home options for investment banking. He's like texting me once in a while. He's like, hey, when it's time to sell this to your next business, don't forget about me. I'm still texting you. What was the sales now of Native? I bet you that's doing 200 or 300 million a year now, right? 500 this year. 500. Oof. Coulda, woulda, shoulda. No, I'm joking. It's a lot. I would have sold probably as well. I don't think I could have done. Yeah, I don't think I could have done what P &G has done without that. They made it an amazing brand.

1:09:39They think about product development. They think about shelf space. They think about things in a way that's really spectacular. And I'm not to say that there are things where I look at them, I'm like, ooh, I wouldn't have done that. I definitely see that once in a while. But ultimately, the reason that I sold and what I did was I wanted to learn from people who are masters at something about how to grow something from 30 to 100 or 500. and I think I learned a lot of that while I was there. And so, you know, people always do regret it. There's not a day that goes by where I go to bed and I'm like, man, I shouldn't have sold.

1:10:10I'm always like, that was the right decision. We'll wrap up with this one line that you told me. You were saying, you were telling me about the sale process and they were like, so how are you going to expand? And you looked at them all dumbfounded. I go, are you, and you go, well, can you write the words native on a shampoo bottle? How about on toothpaste? Can you write that? okay, that's how you expand. And that's exactly what they've done. I actually don't use the deodorant, but I use the soap. The soap is my favorite. You've even had Melissa's Cupcake soap and you have all this other soap. I love the soap.

1:10:44And so your... The body wash. Is that right? The body wash? Yeah, yeah, yeah. Yeah, yeah. And your body wash. And your smart-ass reply was their strategy and it worked. So congratulations. Yeah, that's right. There's like a guy in the back just taking notes. Yeah, he's going to call someone. Hey guys, can we write native on this bottle? Can we do that? It was bananas. I remember that. Right on. Moise, thanks for coming on, man. And we appreciate you coming on. Thank you very much. Talk to you next time. 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.

1:11:21On the road, let's travel, never looking back.

1:11:28Hey, 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.

1:11:58If 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, and Evolve Bank and Trust members FDIC.