Syed Balkhi: How He Went From $0 To +$100M Before Age 30

25:49You know, like I'm going to provide my I'm not going to provide my for my family. This gas station is going to provide for my family. I'm going to put food on the table. Dude, it allows me to one, sleep better at night and to be more bullish in the deals that I'm doing. How many gas stations you own now? Ten. And you own a bank, too. I bought a bank. Yes. Wells Fargo. Wells Fargo. Because you have a cool blog post where you're like, I used to go to this bank all the time and I decided to buy it this year. Yeah, I used to ride my bicycle around it. I couldn't go to the bank. I didn't have a bank account at the time.

26:20I used to ride my bicycle around the bank because there was a sports authority there and an office depot there. I would just ride my bike into that and then I bought that building. What amazes me is how... I don't know if your similar web estimates are right, but do you say what your monthly traffic is on WPBeginner? No. But it's in the millions. Okay. So let's just assume that SimilarWeb is roughly correct. Two to five million. We'll give it a huge range a month. That's a lot. That's not that much. What's crazy to me is that... I mean, that's high intent traffic. It's likely people who are coming to buy something like they want an email software.

26:58So they're coming for a review. It's just amazing to me that that much traffic has created so much value. I think when you start your online business, most people think about maybe a CPM model of monetization or a CPC model of monetization. There are other and better models of monetization, right? You can have CPLs, you can have CPA, you can have a combination of CPL, CPA, you can have recurring commissions. So you're talking about CPM, meaning just$10 per 1 ,000 visitors for a display ad versus cost per lead or cost per acquisition, which is someone buys something, they give you$100 per month.

27:44If it's a MailChimp and someone's paying$500 a month, they'll say, all right, you get$100 per month while they're a customer. Correct. And there are verticals that are not available on W3Beginner. Because remember, I was telling you, I did a lot of affiliate marketing as well. There are verticals that will pay you on a lead basis and hundreds of dollars. Just for a lead, not for a commission, like as an affiliate, not like you made a sale. Just a lead will get you hundreds of dollars. And so I did a lot of those. And I still do. So that's a good cash cow. So those verticals are available where you can go and promote something and get over$100 in a lead.

28:24Has the WP beginner revenue grown like the rest of the business? Or is that just like, you're like, I'm perfectly fine with it just being a steady 10 or$15 million a year thing. And I use, I bet you it's super profitable. I'm looking at your team page. I would bet you make 50 % profit or something crazy. And you're like, I'm just going to take that profit and buy more stuff. And I'm okay with that being steady. Pretty much. On a content business, you cannot compound it as much. eventually what happens is you will hit the traffic mass that you hit and you can unlock as many levers as you can, but the compounding will stop because it's a reoccurring revenue.

29:01The person that I referred this year to something is not going to compound next year. I'm not going to get that plus new customers, which is what happens in a software business, which is recurring revenue. So yes, your assumption is right. That while WPBeginner has grown, it hasn't grown at the same pace as the software companies. And that's like a very big mental shift in between recurring revenue and reoccurring revenue for all the creators that are listening. Because once you understand that, you'll start thinking about your business a little differently. So I took all of our profits and invested in, you know, software and tools.

29:38I still have niche tools that are not even related to WordPress that I bought off of Flippa and sometimes just private outreach because I knew those verticals were going to be lucrative. because I had a better offer than they were promoting. And I paid like one guy, I think like$15 ,000 up front. And in the very first month, it made me 18 grand. And now every month it makes me over 10 grand. And it's pure profit. Nobody touches that tool, right? So I think about that just as good as a gas station because like my hosting cost for that tool is maybe like$8 a month, right? Maybe 10 and that's it.

30:14So you can have these cash flow income streams that come through. And that's how I was able to buy the business that I did without any outside financing, without any outside debt. I was also in a market that wasn't fully mature. So there was that advantage that those shrewd PEs and VCs are not in the market, they didn't understand the market. And I could see the potential of a business. So I might buy something and you're saying, well, this has no revenue. It just has user base. And I can come in and say, yeah, but if I do this and this, it can be a seven-figure business. So I might buy something for like six figures.

30:56And then in two years, that thing will make seven figures in profit. You told me something once that sounded almost like a real estate philosophy. So like in real estate, they always say, some people say, you make money on the buy, not on the sell. Meaning like you should buy something knowing that it has both a margin of safety and that you have the plan for how it's going to be different than what the current owner values it at. And I think you had a similar thing. I forgot what the example was, but it was sort of like, let's say, for example, you're like, great, I buy this company and they're paying three and a half percent on their payment things.

31:31But I have a contract with that same payment provider because I have more scale. that's at 2%. So now I know I have 1.5 % just off the gross from day one because I have this contract. And you kind of have this principle of like, almost like you make the money on the buy because you already know. I know I can throw this much traffic at it maybe from WPP beginner. I know I can renegotiate these payment terms because I already have the contract with the payment provider or the affiliate contracts with the companies on the other side. Is that accurate? A hundred percent. A hundred percent. So this was one of the lessons I learned from my mentor, right?

32:05And who has a real estate background. So the philosophy is very much derivative of real estate. You make money on the buy. You have to be. Otherwise, if you're paying a high multiple thinking based on future, I mean, yeah, that might work out, but it has a bigger risk. So from my perspective, you know, I want to have heads I win, tails I don't lose much. And I got that, you know, formula from reading Monish Babrai's book. I was a huge fan of his, Now We're Friends. but yeah, so that's very much finding margin of safety. Explain that more. Heads I win, tails I don't lose much. What does that mean and what's an example?

32:42So a good example would be if a business in your perspective, intrinsic value of it is a million dollars and you end up paying$700 ,000 today, heads you're going to win if this business continues growing. Tails, you know, you still have so much of upside that, you know, because you pay 300 grand less, 30 % less than market value. That in case something doesn't go right, it has to be like 40 % doesn't go right. And you still only lose 100 grand in that situation. So you need to be able to look at the deal and say, what are my downsides? You have to invert the situation. Think about like, how are you going to die in this?

33:24And then don't go there sort of thing. You sort of have this, like, pay attention to the cents and the dollars will follow type of vibe where, like, you're really not, you're not, I guess I'm surprised at how, maybe I don't know if it's still the same way. I'm surprised at how small some of the things that you do. And yet, because you own 30 or 40 of them, they're really accumulating. Exactly. So, dude, when you come from nothing, you have to have a good sense of where the money is going to go, right? And you have to be very conservative to not lose it all because I came from nothing. I don't want to go back to that.

34:02So I'm very, very cautious. The funny thing about compounding is that if you compound at a healthy rate, and I have a very, very good compounding track record. What is it? I've been compounding it in double digits for the past seven, eight years. What's that mean? 20 %? Like what would be considered good? Like, you know, like for you, you're like, all right, 30 % or 40%, that's like, I mean, that's amazing. You can't get that in any normal investment, right? Exactly. So market compounded by 8%. Private equity might get you in teens. Right. You know, I'm way, way, I'm double private equity, more than double.

34:41So, and that only happens when you can identify a mismanaged gem. Okay. when somebody has a business and they might only be thinking about monetizing from one angle. They're not thinking about it from a full perspective. So I can look at it and say, well, yes, this is the current revenue today and I'm getting a bargain on today's revenue. But here are my contracts that I have with so many different partners and vendors and such that I'll be able to unlock extra revenue here, here, here, here, here. So I turned this business that has one revenue stream to having multiple revenue streams. And that's how you take something that was doing no revenue or very little revenue to having$5,$8,$10 million in revenue.

35:31And you do it enough times and you just let it compound. These businesses are not rocket growth, right? So this is not a business that's going to hit... One business is going to hit a billion dollars in revenue. That's not what's going to happen. but these businesses are going to consistently compound because more people are going to need websites. The web presence just keeps growing. You had a tailwind, which was WordPress was just going to keep getting more and more and more popular, right? That's a huge tailwind. That's like a generational tailwind. That's huge. Already it's going to grow faster than like an average growth rate because of that.

36:05Then you can do things smart operationally. But I got to ask you a question. So our buddy Moyes has this phrase. He goes, the two sexiest words in the English language are distressed asset. And you just said mismanaged gems as a catchphrase of something you look for. I like that idea, but also I'm kind of a lazy motherfucker. And when I hear distressed asset or mismanaged gem, I think work. Oh, I got to go clean up. I got to manage this better. Isn't that going to take a bunch of work and a bunch of mind share to turn things around versus it's kind of like the Buffett cigarette butt companies versus like just buying a beautiful business that's already working and letting it letting it grow for a long period of time.

36:46Am I wrong? I must be wrong about the amount of effort that goes into fixing a mismanaged gem or a distressed asset. What do you think about that? So I think a distressed asset from a real estate perspective, I would say is slightly different than what a mismanaged gem is. My real estate buys, Sean, that I did in the early days were distressed assets. Okay. But it was just the banks needed to get this off their books, right? And I was a cash buyer. I'm not looking to finance anything. I'm a cash buyer. I had the right contacts. So I was able to buy some of those gas station properties. They were already leased out to, Tipperland leased out to like Couchdard, the Canadian multi-billion dollar company that owns Circle K.

37:30All I had to do was just give cash to the bank and take the deed over. So those are distressed assets and I got lucky. I mean, I bought a gas station, but it was all said and done. I paid 90 grand for it. And you're like, holy crap. How'd you do that? That was a distressed asset because you had to do environmental cleanup on that thing. Okay, that was work. So those are distressed assets. When you're thinking about a mismanaged gem, this is a property where somebody maybe due to the lack of effort or lack of experience have not fully understand the potential that is there. What are the commonalities of not realizing potential or common mistakes?

38:09So, you know, you might be a creator and you have a lot of user base and you just haven't think about monetization from all the different potential monetizations that can be had in that one business. We have a friend that was doing this. They were just looking at businesses on Flippa or websites, products to buy, companies to buy. And they were like, yeah, I just want an owner who just cared a lot about product and thought 95 % of their brain just had the word product stamped all over it. And then you're like, cool. So what were you doing for marketing? And they're like, well, it's word of mouth.

38:40And they were so proud of the word of mouth. he's like great as long as their answer isn't facebook ads then i'm just going to start doing facebook ads or even if their answer was facebook guys like what's the budget like oh you know like eight grand a month it's like why eight grand that's like uh you know i don't want to spend too much and he's like i want to spend 80 grand on facebook you know like and basically that was his entire like you think oh this person made 20 million dollars wow they must be a genius and it's like no i just found a business which was so common somebody makes a product and all they think about is product and they really care about product.

39:13They don't spend much on marketing it, maybe none because they don't know it or a small amount because they're just kind of like, they don't think like they don't ask themselves the question, why don't I spend 10 times more on Facebook ads? What would that take? And that's literally the only change that they did. That's a good barometer. The other thing that that worked in our favor was the ecosystem effect. So if I buy an analytics software, I can cross sell out the monster and vice versa. You know, if I buy MemberPress, then I know that all the people who are creating a course will need to buy OptinMonster to have lead generation or will need analytics to track all the things.

39:50So the synergy effect compounds. And that was a big up for us. And I read somewhere that you said something like, I don't buy whole stakes anymore. I don't buy 100 % of the company anymore. I try to buy 49 % because I can't, I have too many things. I can't run all of them. And then in the pre-call they did with Sean, you have this really cool line. It's in quotes. It says, how I manage a billion dollar portfolio without stressing out. And so I guess, by the way, he didn't say that. That was Sean who wrote that. Oh, really? Well, when I met him, he was like, he said something like, you were like, I travel.

40:28I was like, what do you do with your time? Like, how are you spending your time? And you were like, oh, I love to travel. My family, we go travel. And I was like, I thought you meant like, you know, like, I don't know, LA or, you know, like we go to see the Grand Canyon. And you were like, we're going to Egypt. And then we're going to like the Serengeti. I was like, oh, okay. This guy's like doing like exotic travel every month. That's cool. He, you said something like, I don't know if this is exactly right, but my brain heard you basically stack a bunch of calls with your kind of operators in the last week of the month.

40:58And like, that's your only time to like stress out or think about like those calls. And then the rest of the month, you're not thinking about those things. You're reading, you're playing basketball, you're doing other things. And so A, is that accurate? And B, like I interpreted that as, wow, this guy's managing a billion dollar portfolio and he's not stressed out. That's awesome. Yes, that is fairly accurate. Now, it didn't start that way. I want to emphasize that it didn't start that way. I didn't figure this out up until maybe two years ago. Okay, so just to put in perspective. In terms of like me being as chill.

41:37What was like, what were you doing before that? You know, I would have to go in, sometimes clean the business and like, oh, this is not doing right. I would get involved too much. Were you a hard ass? Depending on who you ask. Yeah, sure. According to me? No. According to everyone I ever worked with? Hell yeah. Like you seem like you have a ruthless side to you, even though you're polite and kind, you seem like you could be ruthless. I would say I could be very disciplined. Ruthless might not be the right word. Did that sound so ruthless the way you said that? That was awesome. Yeah. That's a ruthless thing to say.

42:10That was a fucking ruthless thing to say. I loved it. So the trick is, you know, like people say, hire good people, get out of the way. But that sounds easier than it is. So we use EOS in our companies. And some of your audience might be familiar with it. Others might not be. It's an entrepreneurial operating system. And adds transparency and accountability. Oftentimes when, you know, I found, I've sometimes bought businesses from the founders who started delegating, but they really abdicated. And then the business went down. And then, you know, now they're like, they're really checked out. So now they're like, ah, this thing sucks.

42:45Now I'm back in the business and it's a mess. And they will come and exit to us. That's a mismanaged gem, by the way, because all you got to do is put back those accountability things and maybe put a right team member. And this will start kickstarting again. So you have to delegate, but not abdicate. So the EOS scorecards and good P &Ls monitoring will help you with the accountability piece. So the P &Ls for all of our companies are managed by my finance team at the HQ level. That's cool. So you, I want to talk a little bit about ideas. So you built this amazing thing and you've been basically kind of like building cool stuff, making money since 12 to 32.

43:29So you've had this run. I'm curious, you know, one of the questions we always get is, all right, well, you know, now it's easy for you. It's easy for you to just keep doing what you're doing. But like, I'm not you. So that's, you know, it's inspiring, but it's not entirely helpful. What would be more helpful is like, what ideas or opportunities do you see that like somebody else could do? You're too busy to do them or they're too small for you now. What ideas or opportunities do you see that other people could do? I think about cashflow. So if I had nothing, you know, of course it's a lot easier for me now.

44:03I can say, hey, Andrew, I want to spend, I want to invest in Tiny. I want to go do this. And I can do a lot of those with the means that I have now. But if I was starting all over, The first thing would be to go build cash flow again. And the easiest way to build cash flow is services, you know, agency business. Right now, content agencies, since I know content well, using AI, I would crush it, you know, because I already know that brands like Shopify, et cetera, are using AI agencies to create top of the funnel content. Of course, there's some human editing involved, but this changes the game Because if an article used to take maybe four hours to write, now you can do it in 45 minutes, right?

44:44Because if you know the game right. So a hustler, younger version of me, that's what I'd be doing. Content agencies, copywriting agencies, all AI power plus human review. I would use tools like clay.com. I'm not sure if you've seen clay.com, but it helps you automate your sales outreach. you dump a profile and it finds all the data on that person you can write you can use GPT to write emails to them and then just hit them up right just cold outreach cold outreach cold outreach because not everybody but a small portion will you know take you up on it deliver a great service go above and beyond with them watch the word of mouth take you places you raise prices and I think that's that would be the way to go for me if I wanted to start all over again step one, build cash flow, then figure out how I can take this cash flow to build some recurring revenue stream.

45:42Because in agency, you still only have reoccurring revenue stream. And so then you would, would you buy versus build from there? And talk about that distinction, because you started off as a builder, you've now bought like, I don't know, 30 companies or something like that along the way. And I think you studied not just Charlie Munger and Warren Buffett, but also Mark Leonard at Constellation. And you had told me something like you read all his annual letters and there was one thing in there that really stood out to you about building versus buying. What was that? Yeah, it was one of his earlier letters, maybe like a third one or fourth one or something like that, where Mark talked about that there was three types of growth that Constellation was experiencing.

46:26One was growth through organic, which is just your business growing organically, in their case, maybe 7%, 8%, whatever. The second part of revenue growth was coming from acquisitions where they would just go buy revenue. And the third one was initiatives. And initiatives would be things like new bills. I have this product, now I'm going to build a second product. And he was like, these turned out to be very expensive because it required more resources than time that you plan for. It takes away time of your senior people and you're not even counting those things. So they're distracted. And he's like, you know, I'm a capital allocator.

47:03And from a pure capital allocation perspective, the return on invested capital isn't always great because bills have higher risk. So if it doesn't work out, it's crap. For the first year or so when you're building, there's 0 % return on your investment in that time. So the compounding return is lower. And this was my take was, you know, So you can have ad spend of three years CAC. At that point, might not just go buy a company that has guaranteed revenue, and then you can cross promote. So that sort of took me away from the initiatives idea. So most of our focus and all of our focus is on buying.

47:41One thing that I imagine Sean is a little bit like this, but I'm definitely like this, where creating products and new businesses is part self-expression, where it's just exciting. it's fun to do that shit and i'm not like the most disciplined person when like the reason i don't like real estate is i'm like dude i i i'm not very great at just looking at this excel sheet and unlocking value like that's not that's not what i'm skilled at and i don't know if i even particularly like that where did you learn how to like unlock like find value that you could unlock and what are some of the like common themes that you see uh with that i don't know sean are you like that too yeah i am uh but then i'm also a short a natural short cutter i like to find the simplest path to the solution and that so like while creating like you had this thing you said on the pod that was hilarious you're like i'm an artist bro i'm just an artist i gotta create and i definitely feel that i have a creative itch to me but i also have a path of least resistance itch to me where i'm like oh there's some beauty in just finding a simpler a simpler way to win you know like I agree with that I also think it's fearful or it's it's fear to outlay to pay like with the internet you could start with nothing and spend time and you can get something but I think that's or you could he's like you could build something new high chance it's just not going to work it's a zero it's also going to take a long time if you're buying something that's already working yes you outlay cash but are you actually taking more risk there's a difference between putting out cash and putting out risk and I think what he's saying is that but that's what I'm asking is the difference.

49:19I'm asking the difference between putting out cap, like, how do you make that gap small? So I'll say this. So when I started, Sam, I was very much an artist like you. I enjoyed my creation. I enjoyed putting my, you know, fingerprint, footprint, whatever you want to call it on those. So when, if you were looking at the early days of Optin Monster or those products, you would have my footprint on them. And you had like a$20 ,000 bill to the Serengeti with your family of five. No, I was not doing Serengeti when I was building the business. I'm not doing Serengeti when I was building the business.

49:55I was very, very much involved. But a big mindset shift that happened in my career, which has led to, I would say, tremendous growth for Awesome Motive is the mindset of going from a creator and operator to a capital allocator. Right. And this happened when I was studying Buffett, Munger, Monash, etc. Buffett says, I'm a better investor because I'm a businessman. And I'm a better businessman because I'm an investor. Now, you read that and you're like, okay, it sounds good. Cute, right? But when you think about that from a first principles point of view, what's the commonality between the two is that both investors and the businessmen are resource allocators or capital allocators.

50:34So when you tie that together, that was the aha moment for me. when I think about, okay, if I start this new thing, yes, I'll make X. But if I buy something, if I shortcut it, and let's say I buy something that's doing$2 million in revenue, 20 % or 30 % of$2 million is always going to be better than 10 % or 30 % of$100 ,000 or 100 % of$100 ,000 for that matter. You see what I'm saying? What's the biggest deal that you've bought? You don't have to say which one, but what check made you sweat? What check made me sweat? None of them. because I'm not buying, like I'm not putting 80 % of my net worth or my cash in any one of those deals.

51:13But have you bought things for tens of millions? No, no. I have not bought anything in the tens of million dollar range. But these are... So single digit millions? Single digit millions, single digit millions. That is fucking insane that you've built that much value with like these little small, like whatever Sean said, the cigarette butts, like you've made the cigar with it. But, and are you doing all cash up front? or there's no way you do that. You're way too sophisticated. Mostly, mostly all cash up front. You do do that. There might be some pieces of like seller financing, but one of the advantages that we have compared to somebody offering like a higher valuation is that we can make the process really seamless for the seller.

51:59That also allows us to get a better and a more attractive valuation. But, you know, if you try to ever sell to like a private equity or a VC, mostly private equity, you'll be on the hook for like six months. They'll be dragging you, asking you for all sorts of nonsensical stuff. And by the time the entrepreneur is burned out and it's just a shitty feeling. With us, you know, you send me a message over the website. My assistant sourced through it. I'll look at it and say, OK, yeah, this is good. We'll like look at it and ask you for the P &Ls. within like a week or so time, we'll give you an LOI and then we can close in 30, 40 days after that.

52:35Holy shit. Are you the only decision maker? Yes. That's insane. I like to think that I'm the chief risk officer of the company. You told me a story about risk. You, because I was like, okay, you buy all this stuff. Like how much debt do you have? You're like, no debt. And you're buying, you know, with a margin of safety and you're like... Even with his mortgages. He says no mortgages. No mortgages. And look, there's going to be a lot of financially savvy listeners here. And I have many, many financially savvy friends who are billionaires. And they disagree with me on this. But the way I was raised in Pakistani culture, debt is considered bad.

53:14It's considered taboo. And sure, leverage can help you grow faster, especially when used in a smart way. But it also takes away the margin of safety, which in troubled times can really destroy your autonomy if you're not being careful. So, you know, I'm okay with getting rich slowly. And I think I've done all right for where I am. I see myself as a turtle in a rabbit race. Bro, you're a 32-year-old, like, pretty much billionaire, dude. You didn't go that slow. You know, in 60 years, I think I'll be okay. It helps me sleep better at night, be more bullish. I don't know. Sean, Sam, do you know about Charlie and Warren's third business partner?

53:54No. No, tell the story. See, nobody knows about the third business partner. So they did have a third business partner. His name was Rick, right? Rick Warren or something like this. And he was just as smart as them, but was in a hurry to get rich. And Monish asked Warren about what happened to Rick at one of the lunches that he had. And this is public. I'm not sharing with you anything. Warren's like, Rick's a bitch. No, no, no. Warren said something along the line with like, Charlie and I always knew that we would become incredibly wealthy, but we were just not in a hurry to get wealthy. We knew it would just happen.

54:28Rick was just as smart as us, but he was in a hurry. So in the 70s, like 73, 74 downturn, what ended up happening was that Rick had margin loans. He was highly levered and the stock market went down 70%. So all those margin calls happened and he had to sell his Berkshire shares to Warren. and Warren bought him for like 40 bucks a piece, right? So now the same share is like half a million plus. I'm going to get a framed picture of this guy, Rick, on my wall. And it's just going to be a reminder every day. Don't be in a hurry to get rich. It'll happen. Don't be in a hurry. That's going on my wall.

55:04Sean, I cut you off. What were you going to ask him? I wanted him to tell that story, but also I wanted to go back to ideas. So you had given us the first move. if I needed a cash flow right away, I would do service agency, maybe something around creating content for brands and use AI for leverage or generating leads for brands and create a lead agency using AI for leverage. Okay. That's the get started plan, but you don't want to be in the service business forever and you want to get, that's just the get, you know, the escape from broke jail plan. Okay. Now you've done that. What are, what's kind of like level two type of ideas or opportunities you see?

55:41I would look into the quick cash cow of tools. Right now, there are these AI wrappers, right? So you think like, upload your PDF and we'll turn this into a chat GPD. There's several of those out there right now, but you can make it vertical focused. That's what I would do. I'd like chat GPD for lawyers. Add all of your internal SOPs and now your team can just talk to it. Real estate, internal processes, you can do this. my team built this internally in about a week. So it's not very hard to build. You can pay somebody on Upwork to do it and then work with the different AI influencers on TikTok, IG, et cetera.

56:18And this can easily get you to 10K plus a month. I know, as a matter of fact, like several kids that are making 10K, over 10K a month, and some even over 100K a month, doing just this, just the AI wrappers. So I think that's pretty easy. I would look at how I can leverage the Freedom of Information Act to my advantage. What is it? Trying to go into the student businesses. Are you familiar with FOIA? No. What is that? Okay. So basically in the United States, this works only if you're in the United States, we have such thing called a Freedom of Information Act that allows you to request any kind of data from any government run authority.

57:04Usually journalists use it. So we used to use it at the Hustle all the time. So when big stories break, oftentimes it's because a journalist did that and they uncovered some controversial fact. So now you can get creative with it, right? So you can go and say to a government agency, maybe a university or whatever, hey, I want to see the contracts of your last three or five construction projects that you undertook. And that will give you an advantage in terms of how to approach terms and pricing that was approved before. So when you're submitting your bid, it's better. But you can get really creative like that.

57:41I remember I was talking, this was a while ago, I was talking to a guy, he was in Atlanta area, and he would request student information from universities, so public universities. And he was targeting like nursing school graduates and so on. If you were coming out of nursing school, he wanted your information and the schools have to give it to you and you might pay them like a processing fee of like$100 or something like that. But you get the whole graduating class's name, email address, their physical address that the university have in file. They give that to you. And then he would send those students an affiliate offer for a student loan forgiveness program that was passed under the Obama administration.

58:22And so the affiliate offer was for a company that would fill out those forms for you. And they would charge you like, I don't know, 500, 600 bucks. and they would pay this guy. And he was like, I just send one email. I make six figures and I'm one. So I would find arbitrage opportunities like these to build up more cashflow. And then I would go invest. So, but you know, Sam, when you're talking about in the earlier days, you're very focused on the WP beginner, but there was a lot of creative things that were happening like this that was helping my cashflow grow. And that allowed me to invest in software.

59:02or some fun creative cash flow things you were doing at the time i'm not gonna talk about this there's gotta be one prolific one that that is i've heard a bunch through friends of friends i'm not gonna mention any of them but i've heard i've heard some of your thing i mean like the space that you're in everyone starts sometimes black hat gray hat and then as you like start making real money you're like all right i gotta go legit uh but i've heard some crazy stories about what you used to do. That's good. Justin Mayer's had a good phrase. He goes, do whatever you got to do to make your nut and then go on your noble mission.

59:36And I was like, I don't know if I agree with that, but I like the way you said it. Let me put it that way. And I know several people who have done that where it's like, okay, what were you doing before this? Oh, I was running this dating site affiliate ad network. It's like, okay, cool. Plenty of fish. This is not really where you want to hang out for too long or like these poker, you know, poker arbitrages, poker affiliates. There was one guy. Or selling ringtones with subscriptions. There was a guy who emailed me that was like, I think he said you could say this on the pod. He's like, yeah, like I go on Sportsbook.

1:00:08Every Sportsbook has a welcome offer. So he's like, I go on Sportsbook A and they have a welcome offer of like, they'll match up to 20 % of your deposit up to whatever,$1 ,000. And B has the same welcome offer. And I go max out both welcome offers. And I bet on the same game for team A, team B. I lose the small rake, but I take the whole welcome offer. And I just do that again and again and again. And I was like, this is so simple and so funny that you do this. What are you, have you ever had liquidity from selling a business? Or is the majority of your liquid wealth come through annual cash flows?

1:00:45And are you pulling out a significant chunk from the business? Yes, I'm pulling out massive chunks from the business. In terms of liquidity event, yes, I sold two businesses, relatively small, you know, seven figure exits on both of those. One was the YouTube channel business and another was a software photography software business. In terms of the cash flow, you know, we operate with a very healthy cash flow. So I moved that out to the whole core level and then used that cash to invest in private businesses as well as in real estate and public markets. If you had a pie, a good question Sean always asks is, what do you do with your money?

1:01:35If you had a pie of your net worth, what's that allocation looking like? A pie chart, not just a pie. A pie chart or a pie. Yeah, or a pie. It's so heavily skewed towards my business, the online business portfolio. Extremely, extremely heavily skewed. I would say then a good chunk is in the public stock market. And then I have cash. Do you actively manage your portfolio or are you just doing boring shit? Big chunk of it is boring. You know, dollar cost average index. I have begun to play with a little bit of money to see what I can do with it. And I've done all right. Like stocks or other stuff?

1:02:19No, no, stocks. I'm only talking about public investments because real estate is separate. You talked about coming from nothing, literally sleeping on the floor because you're like, why would I buy furniture? I should not buy furniture, even when you had money. But I believe two things. A, money is a tool. It's not the end goal. It's a tool to enable you to do something with it. And B, there's no point to money except for to enhance your lifestyle, other people's lifestyle, improve lives in some way. It would be a shame to just have the money and never use it. And spending money is as much of a skill as making money.

1:03:00You just start it later in life. Have you learned how to spend money? And what have you learned? What can you teach us? yeah uh yes in the early days i saved everything i mean i did i did not buy a bed until i got married dude just to put in perspective even when you were dating no there was no bed ladies find you a man find you a man with no bed so so you know i i i met my wife in high school um so so she's known me since i was broke and you know her her parents weren't that well off either So, yeah, in terms of learning how to spend the money, yes, now I have. For me and the culture and how I was raised, we take care of family first.

1:03:49And my first thing was to ensure my parents are retired because my dad worked really, really hard when I moved to the U.S. So my parents are retired. I mean, they go to Pakistan maybe like four times a year. They're in Pakistan, you know, like right now, for example. So that was first thing first in terms of making that impact. In terms of traveling, I realized that I get a lot of creativity and joy out of just going and seeing new places. And I spend the money on those things. Are you giving equity to your people? Is there a whole co that you fully own and then the whole co owns 80 % of this company, 70 % of this company?

1:04:32Yes. In the early days, that's what I did. Now I don't do that. Now you don't give equity to the operators. Do you regret giving equity? No, I enjoy working with those co-founders and I don't think I would be able to do what I did without them. What now? You're only 32. How do you get up in the morning and feel motivated? What's driving you now? I want to build a generational company. Sounds like you're there though. No, I think it's generational when my kids are older and grandkids are around. I'm probably going to be doing this till I'm dead. I enjoy the game. I enjoy the fun of it. I know Sam doesn't get excited about buying a business and fixing it up and growing it.

1:05:15I get a thrill out of it, you know, because for me, that's the opportunity. That's the hustle. Like finding the edge, getting that deal. You can say in some sense, just getting an unfair advantage. But knowing those tricks, knowing those tactics, giving me a head, like if you play basketball, I mean, we all play basketball and I sucked at it. But there were some people, like Alex was amazing because Alex had been doing this for a long time and he had tactics, he could just cross you over or whatnot. I like having those tactics in the business. What's crazy is you might be probably in the top 50 richest, maybe top 100, top 200 richest under 40-year-olds in America?

1:06:03I've kept a very, very low profile. And the only way this would be validated is if I was ever to raise a round or if I was to exit, right? So right now, what I can see and looking at our numbers and what similar companies trade at and exit at, my assumptions are based on that. But it actually doesn't matter to me one way or another So I'm pretty uncomfortable. This model of buy, don't build and of becoming a hold co and having a portfolio. Like there's a whole bunch of people who I know that are trying to do this right now. I'm sure you get a bunch of questions. I think I've called you, asked you a bunch of questions about this.

1:06:43What do you think they get wrong? What's the common mistake or trap you think smart people can fall into trying to do this path? Or what's a misconception that smart people have when they come into this? One thing that I've noticed, I've noticed several things, but this is the primary thing, is that the excitement takes them away. So they will overpay on a deal and then regret it later on when they find out. Because oftentimes they're taking investors' money. They are on a timeline. Most of them are trying to raise a fund, your typical 10-year plus two years, whatever. So they're not disciplined enough to wait.

1:07:24And I have no rush. If I don't buy a company this year, it doesn't make a difference. So it allows me to be more measured and disciplined in the deals that we do. And that's probably the biggest thing. And or underestimating the problems that exist in a business. The first interview that I saw with you was on Mixergy, our friend Andrew Warner. it looks like it might have been 2014 but i think it was even before that and andrew was like how much revenue do you do you do and you go andrew i told you i'm not going to tell you this and uh it was pretty funny and then i asked you to come on here and you're like i'm not telling you these numbers you've told us a lot of shit like it seems like you're you're you're in a different uh sphere than you were before where you don't mind talking about some cool stuff and i think that that's neat because you're like maturing from like this hacker probably gray hat hacker from you know 20 years ago 15 years ago to like kind of a tycoon i think you know when when i was younger i was afraid um you know just from a taboo things but also i didn't i want to fly under the radar.

1:08:43I still do, but I wasn't very vulnerable. Um, I struggled with vulnerability and that, that change as my network changed as, as I continue leveling up, um, you know, with, with, I mean, now my, my forum is amazing and with YPO, but it's not a YPO forum, but everybody's in YPO. Um, and those, those kinds of, you know, groups really, really help you mature and find your blind spots and things like that. So, so I'm, you know, definitely appreciative of the friends that I have who call me out on those things and they have helped me become better. I'm going to have to use that little clip for my new company as an ad.

1:09:25Thanks. We'll use AI to replace what the company you said with Hampton.

1:09:35No, man, I think, by the way, if your goal is to have a low profile, I have a feeling that's going to change when the headline of this podcast comes out. Because I don't think, honestly, that he's trying to keep a low profile. I just feel like you care about being humble and you came across a lot of humility, you know, not false humility. You know, false humility is basically like, I'm going to downplay everything and not tell you anything. And that's actually like a different form of sort of, I don't know, arrogance or narcissism. The non flex flex. Yeah, the not flex flex, right? Or it's sort of this close the door behind me on the way in.

1:10:13So, you know, I'm in, but you can't get in because I'm not going to really do anything. Like, you know, I think the best people are the ones who sort of become the person they needed when they were younger. And I think that like, you know, the younger version of you, if you heard something like this, all right, this guy came from nothing, moved here for Pakistan, didn't speak English, was like sitting in the library because he did not make friends in the school was like, all right, I want to play video games. The library had a firewall. So his first business was creating a proxy to get around the firewall.

1:10:38And he started giving that to other kids as both a way to like make friends and make a little bit of money. And then he took money and like, it was like, OK, how do we get more customers? And it's not like he's some business savant. He just kept asking, how do we get more customers? Oh, what if a directory posted about me? how do I get them to do that what's in it for them and like you know you just one foot after another so I think you uh yeah I think you did a good job of basically like without um putting yourself in a position where you said something you're uncomfortable with you know you you did share stuff that I think is you know for me at least pretty uh pretty inspiring you're somebody that uh you know I gave Ben a list of like five people I was like you know who are the five people that we've met because we met a lot of people last two years I said in the last two years who are the people that we've met that were kind of the most inspiring they seem to have a blueprint for life not just business that was working for them yeah their business part of their life was working but they were also like content and they weren't you know like in the first five minutes of meeting them like weirdly bragging about stuff or like saying something that revealed some like weird insecurity that's driving them still and they haven't gotten over it's like i don't know those people are their characters they're fun to be around but like i'm not trying to be them um you know like somebody who's you know has a family life that they actually care about So we put you on that list.

1:11:52And I'm glad you came on because I don't think most people even know your story. And that's a shame. I think more people are going to know your story now after this. Where should people follow you? Or where do you want to send them to go from here? Well, really quick, Sean. Before we wrap up, I want to tell you something. So he has this website. So Google Syed's... I want the listener to Google this. So S-Y-E-D, and then his last name B-A-L-K-H-I. And then Google that, and then the word net worth. He's got this hilarious blog post. Oh, this is yours? Sam told me about this. Yeah. Yes. Where it says, what's Syed's net worth?

1:12:30The first line, you're probably thinking, and so his website comes up first and it's a blog post. You're probably thinking that I'm some sort of narcissist writing about my own net worth in third person. It's quite the contrary. I was looking through search traffic for my blog and I noticed that I have a lot of type in traffic for users simply searching my name and then the term net worth. And then he goes on to explain that it's like, it's always changing, but it's not. But knowing someone's net worth is not going to help you succeed. He's got those hilarious posts. And it was really funny. And then you also I want to give a shout out.

1:12:59We talked a lot about money and shit. You've got amazing posts where you do an annual wrap up. I've been reading that for years. I think you started in 2017. 15, 2015. 2015. You put a big emphasis on philanthropy. So like you have a school. I think you're big on schools, right? You build schools. I forget where Pakistan, I think. And you like are giving away, uh, you put a lot of emphasis on, uh, philanthropy and then it's you and your wife and your kid and a lot of these stuff. And you have your own foundation. You're giving away a lot of stuff. And so, um, I think it's awesome. I think that to, to reiterate what Sean said about being like, uh, you know, he has this joke about being a total man, but in a way that's kind of like what you are is like, you're like a holistic person and your, your personal website does a really good job of explaining that.

1:13:44Yeah. You know, I started doing those write-ups when my son, when we found out we're going to be, you know, we're going to have our son. I was like, okay, I should start recapping this. Well, we start trying to have a kid. I'm like, I should start recapping what's happening in my life. So that way, because I'm going to forget it. And at some point, you know, I may want to tell him, oh, check this out, check this out. And that's how those year-end reviews came about. And I enjoy writing them. and a lot of people love reading him, including you. Thank you, Sam, for reading it. And in terms of education, I do believe that levels the playing field.

1:14:20And that's why we do what we do. Well, I was just going to say, Sam gave you a compliment. I'm going to make fun of you. The homepage needs a revamp. You go entrepreneur, investor, and marketing extraordinaire. With extraordinary in italic. And then there's a photo of you with the headset. The Bano mic. The TED Talk. The Madonna mic. You got the clicker and you're doing the hand gesture talking about, you know, you got to start with why. And you're above that now, bro. You've elevated to tycoon status. Now you got to have the super minimalist thing where it's like, yeah, all why? And it's like, you know, we buy companies of all sizes.

1:15:00Please inquire. That's what I should say. Yeah. Like if you have a company for sale, I'd like to buy it. if you go to awesome motive website i really want people to know about awesome motive instead of me right um if you go on my website i barely spend any time i write once a year that that's the year end review and that's really more for me than for anybody else but if you go to awesome motive.com or am.co um that website this website it says helping small businesses grow and compete with the big guys now that's what we're talking about that's a good one um and it has all the companies that you you that are in under the umbrella uh dude this is you want to come uh do you want to keep coming back you got to keep coming back on you're you're fun to talk to that's sam's uh that was pretty good for me was that good for you question yeah no you're fun to talk to i enjoyed it i enjoyed it and happy to come back i told you we're not we're not we're not assholes no i loved it more importantly are you in for camp mfm part two uh that we're about to host in a few months I'm in and that's the pod

1:16:24hey 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 as an entrepreneur, if you're using a bank that was built in the 90s, you're operating like you're in the 90s. 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.

1:16:54If you're already using Mercury, respect. If you're still using one of the old big banks, I got questions for you. So go visit mercury.com and give it a test drive. Mercury is a financial technology company, not a bank. Banking services are provided through Choice Financial Group, column N-A, and Evolve Bank and Trust members, FDIC.