Why Is Andrew Wilkinson Monetizing His Twitter Followers?

32:26We're happy to own that one. We'll hold it forever. But that's not an area we want to focus on. Is that Beam? Is that division called Beam? So here, I'll just read it. It's called Beam. I'll read here. This is from one of the reports. So founded in 2006 with$0 invested, never raised the cent of equity. In 2021, it did$62 million in revenue with earnings of$21 million. 20 sorry that was 21 2022 it did 81 million with uh about 20 million in in operating earnings so those are the public numbers yeah so um so anyway so we had this problem so metalab was getting to the point where they could only do projects for like 500 000 and so we had tons of leads coming and we had nowhere to send them we would just say no um and so we went out and we acquired a small agency in Spain.

33:19We spun up 80-20. We kind of basically said, look, we have a sawmill. We've got all this sawdust coming out of the sawmill, all this demand. We should go form this into wood pellets and sell it. And so we basically created a whole constellation of smaller agencies to service the leads from the big one. And then all of those agencies have kind of moved out of the house now. So they're not reliant on Metalab leads anymore to the same degree. and we've had some amazing successes. While they're not as big, most of those we started for 25 grand maybe or up to the biggest one we bought maybe for 500 grand.

33:56That business today does two or three million dollars of EBITDA. So we've had some really good wins but I have this whole framework of like one plus one equals 100 and you guys had Syed on. Yeah, what'd you think about that? Last week, I guess. I loved it, it was great And there's so much about the way that he thinks we've read all the same books. A lot was very similar, and I was nodding my head along. But what he did with WP Beginner, where he goes, hey, I've got this huge source of traffic. I've got all these users that want to be told what plugins to use. And then he can go and buy these plugins that have a customer acquisition problem.

34:31They've built a great product. They're built by a developer. They don't know how to market it. They don't know how to source customers. When you put those two things together, you're basically buying this business on historical earnings, but you know you can 10x it tomorrow. And to me, that kind of reminds me of what we've done in the agency space. We've said, look, we have 100 leads coming in every month that are things we can't service. We might as well spin up all these agencies to make a bunch of money from those too. And I love that model. You told me that the revenue and the profit, I mean, it's almost 20 years old, that the revenue and the profit in some years, it's been very lumpy where it went down a significant amount the next year, right?

35:10Oh, yeah. It's a roller coaster. This is the thing is everybody that looks at these businesses goes, wow, these are incredible. I'd love to own an agency. The reality of an agency, though, is that it's a whole bunch of people. Their hair is always on fire. They either have too little work or too much work. Maybe they're overhired or underhired. And the margins can swing around a lot if you're not very disciplined. So these are very hard businesses. They're not easy, but they can be wonderful businesses from a cash flow perspective. And certainly, I mean, Syed said it as well, but if I lost everything and I didn't have my Twitter subscribers, I would probably go start an agency.

35:53I think that is the easiest way to make$500 ,000 a year very, very simply. That's changing with AI probably. What niche agency would you do if you had to start over from scratch? would take away all your money and all your audience? Well, I would do design just because that's what I know. But, you know, that's my world, right? Like, that's where I started. But I don't know how that evolves over time. Sean, are you thinking about doing an agency? Me? Hell no. Do you know anything about me? I'm looking to get rid of the lazy way. I'm not trying to do the hard stuff. But you can do it. This is what drives me crazy is you guys have, look at Nick Huber.

36:29Nick Huber has 300 ,000 Twitter followers. and he basically said, okay, I get five different inquiries. People message me asking for SEO. They ask me for property appraisal. They ask me for web design and they ask me for... No one asks Nick for web design. Yeah, yeah. To be clear. Sure, sure. But whatever, right? Those things that he can promote. Nick is one of my closest friends. He's doing an SEO agency. I'm like, Nick, do people ask you for SEO? Like I didn't... What he's doing is smart, right? So he's a human router. So he's got all these inquiries and then he's writing them. And so like what Sean did, so this whole framework of one plus one equals a hundred, like Sean, what you did with Shepard, right?

37:11You have this business. It perfectly aligns with you. You know, the product, all you have to do is talk about it a bunch and it will do well. You haven't, but that is a fucking hard business. That is an agency, right? That's a recruiting agency, which is a brutal, brutal, complicated business. That's just been all abstracted away from you. And you could do that. You could abstract away a digital agency. If you guys want to buy a piece of one of my digital agencies and just promote the fuck out of it, I will happily do a deal with you. Okay, I will do that because, you know, it's easy for me to tell people that Shepard lets them hire talented people for 10x lower price than in the United States.

37:46It's easy for me to tell people that, that they should go to supportshepard.com and go do that. That's not hard, right? It's not hard for me to tell people how much insane value there is and how I use that for my businesses. Easy stuff to do. Yeah. and how would yeah good plug I feel like you guys are like when I hear you say this it's like you're looking at it and being like oh a car wash I don't want to get my hands all wet and I don't want to scrub the cars it's like dude you just own the car wash yeah but you have to make sure that the product is good enough that you want to promote which does involve brain power and worry before I wanted to Shepard I tested every product that does that on the market I hired through each of them.

38:26I hired multiple people through Shepard, met with Marshall, and was like, okay, here's a deal that makes a lot of sense, and it's at the right scale where it works versus these agencies from zero, I think, are a lot harder. But I will say, the Shepard experiment has been so great that I can't wait to do the next Shepard because it's the perfect thing, right? Their revenue doubles. My income goes up without the operational load. Customers get a good service that they need and they want it anyways. that's that is like so much easier than for example my econ my econ business is like your agency business like you know yesterday i'm looking at the inventory forecast oh we were way under then we were way over and we're just constantly gonna get this wrong we have we need so many people to do all the operations for this because there's a physical product and you have to do photo shoots you have to do everything to make this business work um and i'm like man this is hard mode compared to you know the easy mode of what the other side of things we're doing totally and that's the that's the thing i think like to a man with a hammer everything looks like a nail so it's like you guys would probably both start newsletters i'd start an agency it's whatever you know and is easy but it's not the forever business like i have this whole thing about um you want to you want to before you launch your rocket you need a launch pad build the launch pad this is the launch pad business right it just provides you the ability to go and do the things you're really passionate about did you explain the the one plus one equals 100 did you say what that is?

39:51Yeah. So, well, basically it's the idea of if you have an unfair advantage. So for Syed, it was, he has WPBeginner, the blog. He has tons of people that are asking, hey, what WordPress plugins should I use? And then if he buys a WordPress plugin, which he can buy for incredibly cheaply, he knows he can boost it. So it's like a guaranteed return. To me, it's like, you know, imagine if you own an airport and there's like 10 ,000 people in the lobby every day, you know that you can sell them hot dogs. A hot dog stand is not a good business. But if you put a hot dog stand in the middle of an airport, I can guarantee you're going to sell a lot of hot dogs.

40:29There's a story after the Syed thing, I started reading about Warren Buffett, who I knew nothing about. And I've been texting Andrew. I'm like, oh, I get why you did this. This sounds awesome. Of course, it sounds awesome when it's from the best person who's ever done it. But there's a story in the late 60s when he was maybe 35. And he goes to a movie theater and he goes, Boy, it would be nice to own a little bit of all these ticket sales of all these people coming to this movie. This seems like a wonderful business. And then he goes, There's this company called Disney that's doing this. They even have a theme park.

41:01Let's go check it out, Charlie. And so they literally go to the theme park to figure out and they talk to the attendants at the rides. And they're like, How many people come to this thing? And they're like, That's how they're doing their research is they actually went to the theme park. And then he ends up buying 5 % of Disney. I think he paid$4 million. So it was worth not a lot of money back then. And he knocked it out the park. And then there's another story about this guy. He's like, yeah, Warren Buffett was supposed to be this wunderkind investor. And we had all heard about him. But I was in New York and I saw him walking around New York, like pacing, counting his paces.

41:35And I asked him what he was doing. He's like, oh, we're going to invest in some type of real estate deal. And I want to figure out how many paces it made up of this square block so I can guess how many people are going in. It was something crazy like that. It was really funny. He would actually test these things. He would look at the financials, and that was the most important thing. And then he would go in real life and actually test these things to see, all right, is this cool? Is this legit? What's this all about? Or there's a story of him literally knocking on the door at Geico. Like, hey, can someone talk to me about this company?

42:04Tell me what you guys do because the financials look great. And it was pretty funny how he did some of that stuff. He was very hands-on. Yeah, Buffett, I'm so glad that you're deep diving on Buffett now, because it is, the way I think about it is it's business abstracted to the ultimate degree. You think about this guy, he's got 90 or 100 companies, he's got 375 ,000 employees, and he sits on his ass reading in Omaha every single day. And I just look at that and I go, how do I do that? And I don't know that sitting on your ass reading all day is the thing you want to do necessarily but how do you take enough of Buffett you have the freedom to spend your time however you want I always heard people say that so I was like oh I could read so I've been reading like thriller novels and stuff like that I'm like I'm just like Buffett I'm just like Tom Clancy and then I read his biography it's like oh he's reading annual reports all day fuck that I'm like I can just sit at home and read all day so I've been reading like history books I'm like I'm just like Buffett and then I read this book on him and I'm like oh he's reading like textbooks like it's way different yeah chris when chris and i started tiny uh maybe eight or nine years ago we were like oh we were reading all the buffett books and we're like okay this is what we're gonna do we're just gonna read annual reports all day we print out all these annual reports and i think we lasted like four hours doing it so i just i it's so boring and it's these guys are like they're they're so all they want to do is read, right?

43:34Like Charlie Munger, he just reads all day. I think Buffett said 500 pages a day that he would read. It's crazy. It's insane. That's a book a day. 500 a day. It's so boring. I also tried to do that when I went and looked at the annual reports and I'm like, they're using the same words over and over again. I don't even know what these words mean. It's challenging. You have some interesting topics on here. I want to do them. So, what is the give me these two cool businesses. So, cool business number one, no story lost. What is that? Yeah. So this is really cool. So have you guys heard of the business story worth?

44:08Yeah, I'm a big fan of it. Yeah, it's super smart. Started by this guy, Nick Baum. He him and I worked out of the same office when he was starting it. So he was I was one of his first customers. I love him. Yeah, he's awesome. He's living living it up on I think he's on Maui right now just living there and living the dream. But basically, you buy it for like your parents, your grandparents, your siblings or whatever. I think it's like 99 bucks and all it does is it just sends like a drip campaign of questions and so it'll be like hey like tell me about your childhood uh what was a moment where you struggled in a job who is your first boss all these things that you've always been curious to know about your family and you can choose all the questions or whatever and then at the end of the year it compiles it into a book that you can then print and share with your family or whatever and I thought like wow this is an amazing idea so I go and I spend 200 bucks I buy it for my parents and of course my parents fill it out for like three weeks and then they just stop and I talked to my dad and he's like well it's a lot of writing you know there's a lot of time and so I was a little annoyed but I was like whatever and then I met this guy actually locally here in Vancouver and he has this business called No Story Lost.

45:21And it's like the VIP version of StoryWorth. And so what they do is you just say, okay, dad, look, we're going to schedule like three Zooms. You're just going to talk to these people. And they basically have like biographers. They interview your parents or your siblings or whatever. And then they actually write a proper biography of them. So I'm about to get this book, professionally written book about my dad's life. And I'm so excited to read it. And my dad was just so much happier because he just had to talk. And my dad loves to talk. So yeah, it's a really neat little business. I think it's like two grand or something versus 200.

45:56Do you know how big the business is? I don't. I don't think it's very big. Wait, you met this guy? He has a cool business and you didn't strap him down and waterboard him until he told you his annual revenue? I invested. I think I invested 25K in it. Basically, no questions asked. Give him 25K. I think it's doing maybe a million or something. but I think their big problem is customer acquisition. So one plus one equals a hundred. Here I am. Talk about it. Maybe blow this up. And you don't need that many people to do it in order for it to do very well. But I think their problem is that, so Nick makes a shit ton of money, I think off story worth.

46:32You think so? Oh, because it's automated, right? You don't need any employees. You basically build it once and then you just market it. Whereas this, you got to actually have a writer work with every single person that buys it. So I think it's a much harder business model. But as a customer, I think it's a really awesome idea. I feel like these are the businesses that AI is going to like just really help all their margins because you can have an AI biographer. Like an AI biographer is like a very good use case for these LLMs where they can ask questions that they know will poke and prod. They can take your responses and ask follow ups and they can summarize all the audio that's coming in and transcribe it for.

47:13so that the writer then can come in, take the source material, and you could cut the writer's work down by something probably like 50 % to 80%. Did you guys see the book or the business called? It was called Book in a Box. Then it was called Scribe. And Sean was a customer of them. But basically, my friend Tucker Max started it. And he hired a CEO to run it. And basically, you would talk to someone for, I don't even remember how long, and you pay$30 ,000 or$40 ,000 or$50 ,000. grand. The prices have gone up throughout the years. And they write a book for you. And it's mostly business people who want to write a book.

47:49And eventually, it's paid speaking and consulting gigs. But I thought it was doing great. And all of a sudden, out of nowhere, not only did it go bankrupt, but there was petitions from the authors who worked for the company as contractors are revolting. And it's caused a lot of controversy. But they owe you, Sean, a book, right? You paid them like tens of thousands of dollars and you just forgot about it or you bailed on it. Yeah. I was like, you know, I bought, I paid. I was like, oh yeah, I want to write a book. Great. These people help you write a book. They'll, you know, I'm a guy with more ideas than time.

48:21This will save me time. Fantastic. Let's, let's try this. And it's the same sort of idea. Like they, you have the book idea, the concepts, they hop on the phone with you. They help you flesh it out. It's like, great. I want a collaborator with that. And then as you're fleshing it out, you're basically, you can talk and they're taking all the notes and then they'll draft in your, you know, in the voice that you want and you edit. Right. And I was like, oh, that seems like a good idea. But I was so busy. Like we, we started the milk road and I was like, okay, I'm, I'm operating a business. I have to like do this well.

48:49And so I paused it and not, not just did I pause it. We have like five friends who all bought books and then paused them for various reasons. Bailed. No, no, not bailed. In our mind, the door was always open. and yeah, the door's still open, I guess. We just have to pay a little more money to get it finished now if we want to. Well, you know, I think I can say this because they tweeted it, but in During Ventures, Xavier and Siva, they bought it. Yes. Just today, I think. Is that public? Yeah, he tweeted it. Like, he tweeted it out. I had heard about that, but I wasn't sure if he was going to do it or not.

49:25I don't know what's going on behind the scenes, but for a company to go bankrupt that quickly without any type of signs, I wonder if something's going on. Um, but I, I, it seems like it might be a headache, but maybe it won't be. We'll see. Yeah. I actually did it too. Like years ago, I was thinking about, I'm, I'm working on a book actually right now. I ended up not doing it with scribe, but, um, I tried it and I just found that it's great. I think if you want to write like a, a corporate handbook that you can hand out to like your employees or something like that, like a cheesy business book.

49:57But if you actually want to write something like really, really serious and legit, I think it's a bit hard. I know David Goggins. It's like their hit. He's their hit. But I think it's just hard, again, for the reasons we talked about with No Story Lost. How do you guarantee quality when you have that much demand and stuff? I think you'd have to move upmarket. I've been waiting for you to mention that you have doing the book thing because I wasn't sure if it was public or not. Sean, you should read his first chapter. I read the whole thing. Normally, people ask me to prove stuff and I'm like, I don't want to.

50:26And then I started reading his and I was like, okay, I'm actually into this. It's pretty good. it's been quite good yeah i can't wait i think it's gonna be amazing oh thanks dude how far yeah i'll share it with you i just sent the publisher my rough draft it's still i'd say it's still in the phase where like i'm embarrassed by it um but i know that's the important step to making it amazing um so yeah i i think it'll come out in 2024 what's your motivation why write a book honestly kind of to like muddle through like a there's a lot of lessons that I haven't read in other books around business and stuff that we've learned.

51:01So it's kind of the story of building tiny, but also just to kind of muddle through the exact thing we were talking about before about how everybody wants more. You know, it's never enough. They're always trying to upgrade. They're always trying to get bigger. They're always trying to do the next thing and play the status game or, you know, comes from childhood trauma or, you know, something else. And so for me, it's been about pulling that string for myself. So it's been a bit of kind of personal exploration and stuff. It's been fun. I've really enjoyed it. It's probably the thing I've enjoyed most over the last couple of years.

51:34Do you want to talk about some of these other companies? I know you have Routines on here. I don't even know how to pronounce this one. It looks like a Hawaiian name. Yeah. Let me buzz through both. Routines is really smart. You know when you listen to a Tim Ferriss interview, it's like two hours. And sometimes you're just like, look, dude, look, doctor, gut microbiome doctor. just tell me what you do what do you do what do i take what do i buy uh and i actually was talking to tim ferris about this and i was like dude you've got to add like a little segment at the end where you just say here's the books here's the one book recommendation here's one product recommendation here's one habit recommendation um from each guest he never did it too bad um but that's the juice that's the stuff that i ask people when i'm one-on-one with them And so my friend Hamza, who I think you know too, Sam.

52:25Yeah, I use this agency. It's good. Tamba. Yeah, their agency is called Tamba, T-A-M-B-A. They do really good work. So he created this site called Routines. So it's routines.club is the URL. And what it does is it basically runs you through the day of successful people. And so they do like Huberman, Tim Ferriss, Peter Atiyah. They actually just did one on me, which is kind of fun. Yeah. Yeah. And basically breaks down my entire day from start to finish. And it's all these things that I wouldn't even think to share. It's like, how do I organize my email? What supplements do I take in the morning?

53:03Dude, your shower and skin routine is huge. Right. Shower and skin, all these random things. What's really funny is he's used Mid Journey or whatever to generate images for all the things. So it's this terrifying You look like Wolverine in this photo. The first picture, I mean, this is just A+. Mid-journey is like, you know, the world's greatest wingman here. Second picture, now I feel like this is like, these are two different people. These are not the same person. But that's one of those challenges in the journey. So you wake up 6 to 8 a.m. Alright, big window. Well, it's depending on if my kids wake me up.

53:42Drink a big glass of water with electrolytes. If it's sunny, you make air press coffee. Nice, nice plug. if it's overcast, you use retimer. What's retimer? It's like these little goggles that you wear and they blast your eyes with bright light to help you kind of wake up in the morning if it's not sunny out. You know how Huberman is like, go outside and see bright light. Oh, this is great. You don't have to go outside. Yeah, so you don't have to go outside. Anyway, if you read through it, it'll take like 20 minutes because there's so many freaking things. Dude, do you take 10 supplements? Yeah, like on and off, depending on what they are.

54:16well here's you have a good morning routine by the way was it coffee you snort coke uh yeah i shoot up i shoot heroin right between my toes and it actually says where which foot to do it in uh um but but so here's what's cool about this business is people want to share this stuff right it's like a very infinitely shareable like listicle of like here's this person's routine or whatever But throughout it, if you look at the Huberman one, for example, he recommends AG1. He recommends cold plunges, supplements. It's all affiliate revenue. And so it's just like one of these amazing build the content once, updated it occasionally, focused on SEO, make like$30 ,000 a month plus of affiliate.

55:03It's just a perfect, we talked about earlier, like the launchpad business. It's not the sexy business. It's the launchpad. This is cool. I like this. I like this example. Do the Maui Nui one. What is that? So this one is really, I thought this was super goofy when I heard about it. And so basically me and my girlfriend, we were visiting Maui and Huberman was like, oh, you should meet this guy, Jake, who runs Maui Nui. And so this guy picks me up in this like ramshackle truck. He looks like a Navy SEAL. He's like the super jacked guy. And he starts telling me, he drives us into this huge ranch that they have.

55:40and he starts telling me about the business. And basically, there's these deer called Axis deer and they're from Asia. I have them on my ranch. Yeah, some Hawaiian royalty brought them to Hawaii to hunt like 150 years ago. And because they had no natural predators, they're just an invasive species. They're like rats. They're like everywhere. And it's actually an environmental problem. So they're like a pest. They actually destroy the ecosystem. And so the government literally flies helicopters and takes like, you know, machine guns and just guns these things down. That's their current solution to this.

56:16And so Jake was like, hey, we could this is great meat. A lot of native Hawaiians hunt the meat and it's super healthy and delicious. They sell it locally, but the FDA doesn't let you sell meat commercially. And so he basically spent the last seven years getting approval to actually hunt and sell this meat. and it's this like super complex problem. So there's this interesting moat in the business. It's going to take someone else like seven to 10 years to compete. And basically what they do is they have a bunch of professional hunters go out with sniper rifles and they, in the middle of the night, they just shoot these deer in the head, right?

56:54And it has to be, the FDA is like, it has to be in the head. So imagine this, you're a deer, you get to live this awesome life. You are eating organic food, you're running all over Hawaii. And then one day in your sleep, you just boom, you're dead. Right. And so I was like, okay, this is really fascinating. So Huberman, Tim Ferriss, Atiyah, they all invested too. And here's what's crazy about the meat. So not only is it like the most ethical meat you could possibly have because it's like a pest, these deer are like killed super ethically and stuff, but they've tested it and it has crazy micronutrient content.

57:30So a piece of salmon is like 14 % protein. this is 20 % protein. Beef is like 9%. It's good for the environment. The animals live natural lives. And then one day, boom, headshot, gone. And so if you're not eating meat for ethical reasons or for health reasons, this is an incredible business. And so these guys sell, I think, like$10,$20 million a year of pepperoni sticks and all this stuff. So anyway, go check it out, Maui. I'm ordering this stuff. Did you invest in this? I did, yeah. can you tell i mean i'm giving you the full pitch your sales pitches are good um sam how did you you said you have these these same deer on your ranch randomly in texas he just told this story about like how this japanese royalty brought it to hawaii and it's like this whole special thing you're like yeah i got i got some of the fuckers in my backyard right like what are you talking about well so it's just i don't know anything about animals or hunting but out in my farm You can only hunt normal deer, I think, for two or three months out of the year.

58:36But we have this thing called axis deer. I don't know if axis deer is like a category of animal or what. No, I'm looking at it. It looks the same. They're basically deers with spots on them. And sometimes they have like tall ears or and so they kind of look different. But they're called axis deer. They have spots and they're all over Texas. I don't know if it's like the same thing or if it's like a category of animal. But yeah, we have them in Texas. I love how this random guy in Hawaii just told a fascinating story. I got a guy that are everywhere. Actually, that's like, you know, totally like they just needed to get this like waste product off their hands.

59:10They're like, you know, he's got 20 percent protein, 80 percent luck and 100 percent power of will. It's like I'm buying this. I love this, man. This is great. Like, yeah. And I'll be like, oh, you need an access to here. I got a guy. You know, guys, you know, like, you know, like everything. Everyone like 20 years ago was really into like drinking milk, right? Like got milk. And then it was almond milk. Then it was oat milk. You guys are going to love my next business. It's rat milk. Are you serious? No, I could have. I'm going to order some of this beef. So like over the last two weeks, I've gotten a little soft.

59:44You know, I had a little injury. So I didn't work out like religiously over the last two weeks. And I've been eating a lot of ice cream because it's hot. So for the next 30 days, Sean, you should try and join this with me. I'm only going to eat meats and Plants and animals I got to get back to basic Plants and animals I like the way you branded that, that's nice Plants and animals, that's for the next 30 days I got to get my act together because I've been eating too much ice cream But I'm going to order this stuff I'm going to order it, this actually looks great Is this a fun business to run? It looks fun to run, but it might be a headache You got to ship this shit all the way from Hawaii I think it's super complicated I think they can charge a premium because I think they're the only people that are FDA approved to sell it.

1:00:24And, you know, they have the story and the brand and the investors and stuff, but it's a hard business for that same reason, right? I mean, there's a lot of people, there's a lot of hunters on the Hawaiian islands that want the jobs and stuff, but logistically, you know, these guys are basically going on these like hikes in the middle of the night to go and do these, like, you know, they're sniping deer and then they have to shoulder carry them back to the truck. And then they've got this whole facility there to process them and stuff. But isn't the problem with this? So I've got a lot of like, I've got a bunch of, the funny thing about Austin is it's full of like crazy health people.

1:01:01Like, you know, you don't even know, like, are they actually insane or are they being serious? Like, you know, they're afraid of Wi-Fi. But every once in a while, some of these guys will say something that's like really interesting and like turns out they're right. And one of them being is like, do you know ButcherBox? ButcherBox is bootstrapped. And I think it does like two or$300 million in revenue. but my health nut friends hate it they talk trash about it they're like this is the worst you should never consume that meat um these guys will also say like whole foods they don't even touch whole foods chicken they're like you can't it's got to like if it's not it doesn't look a certain way i don't touch you're hanging out with justin mares too much i didn't want to name names i don't know if justin if justin has said that explicitly but yeah they're in the same circle it just sounds like something that justin would say for he's probably correct though he's probably but that's my thing is these guys i'll be like all right but are you being like a conspiracy or are you being truthful?

1:01:49And they're like, this one's a little closer to conspiracy. But then with the meat stuff, they're like, this is close to truthful. But the problem with this business, I would think, is the bigger it gets, the worse it gets, right? Well, I think when I talked to him about scaling and stuff, he was like, look, there's a lot of Hawaiian islands. There's a lot of deer. Is there though? I think they can scale it over time. I think... Is there a lot of Hawaiian islands? No, no, no. Well, there's six or seven of them or whatever, right? And they basically, they do this on a tiny amount of land as it is right now.

1:02:18So I think they can really expand pretty significantly. It's not a business investment. There might be a business here. This is a Larry Ellison investment. This is something rich people do, which is as you make money, you start investing just in things that are interesting. You start investing in dinner party conversations. It's like, I can't have a whole portfolio of healthcare SaaS. Even if that's where the most money is made, I need to invest in things that are interesting to me that are cool people that I want to hang out with that do businesses that are worth talking about in life. And there's like, there's like a positive EV associated with that, that people don't really understand until you, you start doing it.

1:02:55And then you're like, Oh, this is nice. You've just got to keep the check small and do a bunch of these. And so you have this portfolio of like interestingness one day. I think I would say, I would say you're wrong. Um, so, uh, so, So imagine like you saying the same thing about Athletic Greens, right? Okay. So I come to you and I'm like, hey guys, there's like these guys, they're like a vitamin, but it's powder. And you're like, that's the stupidest thing I've ever heard. What makes Athletic Greens amazing is that they spent the last 15 years building relationships with all the most influential health people in the world.

1:03:28So it's one plus one equals a hundred, right? They have Tim Ferriss. They have all these people who not only they buy ads with, but they also have all these people owning equity in the business. so a million different competitors can come out but if in your brain the winner is ag1 because that's what you've heard and all the people that you respect do you will do it and you will pay a premium right yeah but that's different like vitamins were a thing uh vitamins were a thing greens green smoothies people understood oh i should eat my vegetables that's been around forever i don't know how many people are like oh man the protein content on my salmon is too low i need to eat deer i need to eat this it's bigger than you think it's bigger than you know what i'm looking for a deer that was shot in the head.

1:04:08That's what I want. No, but there's a huge audience, though, for people who go, I want ethically sourced meat. I do that. That's why I don't like buying a lot of beef. I don't like how they kill cows. Sean, you actually kind of turned me on to that about the treatment of cows. Well, I think this is very hypocritical. I think anybody who's ethically sourced meat, it's like... It's not hypocritical. Yeah, if somebody's like, I ethically killed your dog or I ethically killed your brother, it's like... There's a big difference between something to consume. Well, it's not necessarily killing. It's raising, I think.

1:04:41And then killing. And then sleeping in the head. That was like a key part of it. Think about it this way. So there's a broad spectrum, right? So you think about like industrialized meat is like concentration camps for animals, right? They're literally in these pens and they're fed this horrible stuff and they have these miserable lives. I don't feel good about eating that. Do I feel good about eating an animal who lived a great life and then got sniper rifled in the head? yeah i feel fine i actually feel fine there's definitely a spectrum just to be clear though this is still in the murdering for our pleasure uh for our pleasure part of the spectrum and there's a there's a lot more part of the spectrum that you could go to if you chose to i'm i am uh i'm totally a bit of a hypocrite on this as in i do eat meat so i'm not like i'm not like a vegan telling you this but at least i don't lie to myself and tell myself that oh man i'm doing such a good thing morally here by uh by killing by killing them the best way the nice way Yeah, it's like you might drive an electric car and it's better than driving a gas car, but you're still producing tons of toxic chemicals because you made the batteries and stuff.

1:05:44It's just a little bit better. Yeah, that's right. I agree with you, though. I do think like in 100 years, we'll look back at eating meat and be a little shocked. Yeah, 100%. That's my opinion. Sean, would you, if we went somewhere, would you, like, for example, for Thanksgiving, did I tell you for Thanksgiving we killed our own turkey? No, you didn't tell me that. how was that uh yeah and so would you do that no wow okay i thought that i wouldn't do it would i be excited to am i excited to go do that no i would i do it if that's the thing we wanted to do sure i'm not like anti the whole experience but uh i'm not like pumped about that nor would i like seek that experience out also turkey massively overrated it sucks separate issue and by the way killing it and eating it it did not taste good at all the fake shit like the Butterball turkeys taste way better.

1:06:33And turkey is a horrible meat. But yeah, I agree. Do we want to wrap up with one or two more things? Yeah, let's do... Well, you have a question for Sam. I think that's an interesting one. Why don't you do that one, Andrew? Yeah, I was curious. So Sam, like I look at Hampton. Hampton is a business... I mean, I've said this to you privately, but Hampton is the business that I've thought about starting for 10 years. So I joined something called Entrepreneurs Organization 15 years ago. And I was like, this is a very, very good business. Every member of EO pays$5 ,000. And there's all these local chapters.

1:07:09They self-organize basically. And these guys just must be making an absolute killing. And you have this total lock-in because once you like your forum group, you have these core groups like you do at Hampton or whatever. People don't want to leave. They're locked in. They pay their$5 ,000 a year or whatever it is. They go to events, etc and so i for years have been like someone needs to start the new eo and you have and so i look at it and i i go freak damn i wish i owned that business um what are the things though like just like you guys being like oh my god like you know these agencies andrew owns are the best businesses ever what are the on the flip side what are the things that we we should know about hampton that are make it hard to run or surprised you about running so the thing about hampton so Andrew joined and Sean has been like messaging like maybe I should join and I'm like Andrew wanted to he's like yeah just take my money and just let me join and I'm like no no no you have to get interviewed I just want a little VIP treatment I just want a little past the line it's like we've not done it to anyone if you go to a friend's restaurant and you just get treated as a normal patron that doesn't feel good it's not the same that feels a little bad wouldn't you think well because we have to have we have to indoctrinate people we have to like get them into the values of the system.

1:08:25We have to teach them how to be a good community member. So the thing about Hampton is that in terms of the physics behind it, this is going to be a massive company, I think. I always tell our team, there's nothing holding us back. There's very little outside factors that are going to ruin it. But the number one thing that sucks about it and that we 100 % can screw it up and it can go to zero is if you start letting in too many people too quickly. So you cannot scale it like crazy fast. I think you can scale it fast, but I think you can't scale it like you could a software. You're not just throwing bodies into it.

1:09:01And so we have to be super thoughtful about it, about who we let in and why. Another thing is, is that the feedback loop is fairly short. So people in Hampton have monthly meetings. And then now we have retreats that people go on once a year or twice a year. So we don't get feedback that quickly. And in order to like, I can't just like make an assumption or I can't like have like an MVP of a retreat because someone's flying across the country to go to a thing. So it has to be good right away. And that's very stressful that I can't just... If I own a Shopify store, I can't just throw up a product up there and have someone buy it and then just return the money and be like, sorry, it'll come soon.

1:09:35Or this sucks maybe, but it'll improve with tech. So that's scary about not having MVPs. But the thing about community is once you screw it up, I don't think you can fix it. And so it seems like it's high stakes all the time. And so that's why we're trying to be meticulous about growing slowly. I don't know, Andrew, what am I missing? You've kind of like... No, I think you're right. It's interesting. The thing that made me leave EO. So the chapter, the guy who ran the chapter, super nice guy, like amazing. I love the guy. But he let in a couple people who I really, really didn't like. And I found myself dreading going to some of the events and just kind of just sketchy people, right?

1:10:17Like people that ran a bit dicey businesses and gave me bad vibes and stuff. And that was actually the thing that caused me to leave EO and do my own forums. So I now have four forums that I just manage myself. But I don't think most people are like me. I think most people will stick with it. But you do really have to be thoughtful about who you let in. And I think the hardest part, and I've had this experience, I've ran a lot of forums over the last 15 years and been in a lot of forums. If there's someone who's toxic, the cancer has to be cut out. But that is an incredibly awkward conversation.

1:10:50And it can really piss people off, obviously. And we've fired a bunch of people. We've kicked people out if they talk about confidential stuff publicly. But also, another thing about these businesses, the thing about EO, YPO, Vistage. Do you guys know Vistage? I think I mentioned them. They sold for like$1.5 billion recently. They're already doing like half a billion in revenue. dude they last so long so ypo eo and vistage i think all were either started in the 50s or the 60s and so the cool thing about these companies is if you nail it right you can have it for 50 or 100 years and so that's why i'm really fascinated by these types of companies because there's zero technological there's zero tech like tech everything can change with ai it will have zero hope i think how does how does it feel to be sitting on a winner like does it did you feel the same way with the hustle does this feel no yeah i i felt like the hustle like with with hampton i'm like well there's a clear path to get to 100 million dollars you just got to give it 10 years if you want uh in revenue like i just have to like it's just a time horizon thing you just got to sit and wait and you have to work but you have to wait whereas with the hustle it felt a little bit more We were innovating in a very small space where I'm like, I don't know if the math shows that this will work.

1:12:08It might, it might not, but we're still learning. With this business, I'm like, no, it's 100 % going to work. The only thing that screws it up is ourselves. That's why I say there's no like, physics allows this to work perfectly. You also have an unfair advantage, right? I think that if you, I mean, I guess you launched Hampton privately. You didn't promote it, but now that you do, now that you have talked about it, you have free customer acquisition. Yes, we've not spent money on it. You almost have$50 million a year versus a free marketing by going on podcasts, on this podcast and other podcasts you're on and just talking about Hampton and then your brand value as a person being associated with it.

1:12:47It is that one plus one equals 100. Yes, and right now we've had five or six or 7 ,000 people, I forget, apply. And so that makes it like the easiest thing ever. But if you look at On Deck, On Deck had that as well and they totally fucked it up. they fucked it up because they they treated it like a tech company where they weren't thoughtful enough and they try to just scale and that is my fear of like getting greedy and growing too quickly well they raised ventures why would you raise venture it's like this is a business that pays for it it's got you have negative cash conversion cycle right people prepay you for services delivered over a year and like it's insane yeah so it's like a great business i think it's going to be like i don't think we'll ever sell it but i think it could be like a they can be billion companies, I think.

1:13:29So it feels good. Well, Tiny, if you ever decide to sell it, Tiny will buy it. Or if you ever want to take money off the table. Hopefully it'll be big enough that we'll be buying you. No, but seriously, when I was looking, the reason, Andrew, even though we're friends, I really admire you because people have asked to invest and I'm like, no, dude, this is my meta lab, baby. This is what I love. I don't ever want to sell it, but it might make a shit ton of profit. And we can just use that profit to buy stuff that kind of supplements it. And I don't want to take any money because I don't want to have to feel guilty about doing that.

1:14:04I'm going to be on a helicopter and it'll land on Sam's yacht. And then I'll get there and he'll be like, what's your market cap? And I'll be like, oh, like$5 billion. And he'll be like, oh, Hampton's$25 billion. That's cute. No, I don't know. I remember when we hit five. Those are the good old days. The come-up is always the most fun. I got a lot of advice for you, kid. I think it's cool. But it feels like I haven't talked about it publicly too much. It's because this is the first time where I'm like, I'm just going to shut the fuck up and just be quiet and just keep on going. Because it's working nicely.

1:14:38I think it's actually quite hard to replicate, though. You have to have an audience. It was quite hard to get the early customers. But yeah, it feels good. Well, you're reading the right book, right? Like reading the Buffett stuff and moats. Because I think that's like the ultimate... People think investing is numbers. There's a little bit of that. There's napkin math. but at the end of the day it's like assessing like what is the moat what's the competitive advantage and you just have such a crazy competitive advantage in terms of customer acquisition and then also customer law and sean i know that you're exploring this business even before i don't even think you told me though the big learning it's a logistical nightmare so not nightmare but it's very challenging like in like imagine let's say we have 10 000 members and we're doing all these retreats that's basically a retreat a day you know what i mean like yeah it's quite challenging logistically what we need to do is go and hire a bunch of mackenzie nerds and it's like here's how we do it by hand automate it uh but i don't i don't agree with that i think um so what eo does is they've outsourced everything so when you eo has chapters there's a vancouver chapter for example uh all the members pay their dues and then there's a chapter head and they are managing that whole thing and then when they have retreats they're just told hey, the budget typically is this.

1:15:55You guys all self-organize. One person from the forum is responsible for managing it. Here's the handbook on doing it. And they just kind of do it themselves. So I think maybe there's a better way to do it, but I don't think you have to scale up headcount and logistics. No, I don't think you do either, but you still have thousands of people flying places and you want to make sure that the experience is optimal. So there is still some quality control. Are you going to do like a massive conference, like a super conference of all the people in Hampton with like insane speakers and stuff? Or is that just too much logistics?

1:16:24Yeah, we want to. Yeah. I'm just trying to figure out how to do it. Andrew, what is this Profit First methodology? That's that book that you like? I love this. So yeah, one of the guys, one of the CEOs, actually the CEO of Beam, he sent me this book. And I love the idea. So basically, you know, there's this concept of like, if you eat your food on a smaller plate, you're going to eat less. You guys know about that? Um, so basically what you do, it's very simple. Let's say that you earn a hundred dollars in your business and you want to have a 50 % profit margin. You just take the day the a hundred dollars comes in, you take$50 and you put it in a bank account that you can't see.

1:17:06And that's it. You just put it away. And so then you and your team are left with$50 to run the business. And, you know, you might have to adjust the number and figure out what's sustainable. But what I learned running all my digital businesses was that we had businesses with 90 % net profit margins. And if you had looked at that business and said, okay, well, it's this kind of business. It should have 20 % profit margins. We easily could have run it that way. But because Chris and I were incentivized, we own the whole business. We paid a lot of attention to the P &L and what was possible. We would try and run it at the maximum profit.

1:17:40And so this basically allows you to achieve the same thing psychologically as the smaller plate. you're just showing you're basically budgeting for 50 profit and you're saying figure does that cause issues with your ceo of the company well we don't do it this isn't something that we do this is something that we've sent out to all of our ceos is like hey this is really interesting this might be something you might want to do but i think it works better for small businesses i know a lot of people who um they talk to me and they're like oh you know i have an agency too but we just can't figure out how to make it run at X margins.

1:18:16And I'm, I kind of go like rip the bandaid, right? If you want to make 30 % profit margins, take$30 of every a hundred dollars that comes in, you move it to another bank. And that's what you told me to do. And I've not been comfortable with it yet. Dude, you, yeah. Don't even get me started.

1:18:35Sam, Sam and I have had like text screaming matches. Me just being like, dude, you have to dividend your money out. Cause my whole thing is you don't want to leave excess cash burning a hole in the CEO's pockets or making them complacent. So let's say you own a business that has a payroll of$500 ,000 a month. A lot of people will leave like$20 million in that business. And I think that just lets the CEO feel relaxed. I like them to basically have a month, two months of cash. But you're spending cash that you haven't earned yet. Well, sometimes. But if that's the situation and they need more, then they just say, hey, shareholders, send me some of that money back.

1:19:16But you say, I'm the bank. So for example, in Tiny, the holding company above is the bank. And we basically say, look, keep your money with us. And if you guys hit a snag and you need a little bit of extra money for payroll or R &D or whatever, we'll send that right down in 12 hours. So for prepaid meta customers, which I don't actually think you do prepay, but let's say you did. Let's say someone prepaid for a project that will take a year and it's 100 grand and you get that up front, you're happy or you're willing to just spend that 100 grand before the year's up and the service has been fully delivered?

1:19:50Well, not always, but I think if you can model it. So for example, the argument we were having, so someone pays$10 ,000 for a year of service in Hampton. And so you guys have all this cash sitting in the bank. The thing is, you guys have new members constantly streaming in. So you have$10 ,000 flowing in X times a day. You have very predictable cash flow. From my perspective, I would basically just say, all right, what's your expected margin? And I just take that and dividend it out immediately. And again, it's trying to create a feeling of always paying attention to the bank account, always paying attention to the balance sheet and the P &L.

1:20:30And I just think that when you have a year of cash just sitting there, I think your CEO will naturally be like, oh, we could do this. We could go do a super conference and spend$10 million on it. Or, you know what, it's okay we didn't do that great this month because we've got all this money in the bank. I think psychologically you want everyone eating from a smaller plate. And when you say dividend out, what percentage is Andrew Wilkinson taking home to buy a home in cars and live versus dividend out to reinvest into your own stuff? I had like a, well, so it's different now that we're public.

1:21:04What I used to do is I would get, I owned 80 % of, um, of beam basically. And I would get, so I'd get 80 % of those dividends. Those would go to my holding company. I would buy stocks or invest. My general framework for this, though, is I want to spend 5 % of what I earn at most. And so whatever that number is, if you earn$10 million a year,$500 ,000 a year is just living, doing whatever, and everything else should get invested. So you live on 5 % of your income and the rest goes to Tiny or whatever is the setup for your holding company. Or is Tiny considered your holding company? Like tiny is my, well, so I have a personal holding company where I have my personal assets, but you know, 90 plus percent of my net worth isn't tiny.

1:21:52So, and has it always been 5 %? So when you're earning a million dollars a year, when you're earning a million dollars a year, were you only spending 50 ,000? No, I was, well, I wasn't spending a ton, but I was, what I was doing is starting a lot of businesses. I would say maybe it was 20 % or 30 % back then. But over time, it's come down to about 5 % or less. And it's been there for probably 10 years. But yeah, one of the things I see that a lot of people do that's really quite stupid is they don't let themselves live it up. So they'll own this amazing cash flowing business. And they don't let themselves go buy the beautiful house, go buy the great car.

1:22:33and so they end up acting in this way where they go, well, I've got to sell my company. I've got to have an exit. And I have had friends where it's like, dude, the exit was right in your bank account. You could have just dividended the money out to yourself and then you wouldn't have had this really stressful, horrible experience with private equity and been through all that stuff. So I'm a big advocate of living it up, living a nice life. Don't go crazy and buy Fabergé eggs, but buy a nice car and a nice house and whatever. and then just invest everything else. What percentage of your income do you spend, Sean?

1:23:06I don't know. I don't even think about it like that. Are you allergic to that? Or would you change? I'm not allergic to it, but it's like you said, I would say my income has 10x and my spending has 2x. So as long as that ratio stays about right, that's fine. I don't really look at the percentage versus earnings so much as like, I guess at the beginning when the earnings were lower, right like for a long time i was basically earning like between i don't know like in my 20s i was making like 120 to 160k a year roughly uh for a bunch of my 20s and you know during that time i don't know i was probably i was living in san francisco paying california taxes like you know i was probably spending uh if you include taxes you know i was spending the bulk of my money i wasn't really saving that much probably saving 20 of my money 30 i don't know something like that and you know the Tim Ferriss said this thing on this podcast I really liked he goes unless something's going to make a shit ton of money give it away for free I think that's a great rule in business and content a great rule for creators like us I think the which is partly why I don't like your Twitter experiment although I understand the reasons why you do it I think there's the same thing for sort of like you know where do you put your mental energy around finances it's like this either needs to make a lot of money or save a lot of money or I'm just going to not pay.

1:24:29I'm going to give it zero budget mentally because otherwise I'm just using my mental budget on too many things. I'm just not going to think. I don't want to think about things unless it's like a large swing. So for most of my 20s, I was just trying to figure out how do you make way more money? I'm not trying to go from 20 % savings rate to 30 % savings rate. It's like, how do I 10x my income? That was like the first all I was thinking about. It took me a long time, but that paid off because once you do that, you don't You're so glad you never worried about the smaller thing. Yeah, Ramit Sethi has a great book called I Will Teach You to Be Rich.

1:25:02And he talks a lot about that, right? People obsess over like, oh, you know, I used to spend six bucks on a Frappuccino and now I just buy a black coffee and save three bucks. And it's like, you're so much better off focusing on the macro, you know, your mortgage, all those sorts of big expenses. And then just focusing on making way more money to the point where it really doesn't matter. He goes, don't focus on$3 problems, like a cup of coffee, focus on$30 ,000 problems, like getting a raise. I've noticed this with hiring too. Like you hire somebody and, um, I'm negotiating like a 5k or 10k salary difference.

1:25:34And I'm like, okay. Um, so, you know, you're this basically like an$800 a month gross, uh, difference net to them after taxes is going to be like$500 a month difference. Okay. Fair enough. Not saying that that's nothing, but like the percentage of their concern around that difference versus like the role, who I am, what they're going to learn from this. They don't really think about how do I use this opportunity to be able to make 10 times more money in the future. Or better, what are the terms on their stock options? How are they struck? What's the valuation? Is it reasonable? Yeah. What is my incentive if I could do a great job?

1:26:14What does a great job even look like here? And then how much does that work to you? And can I structure an incentive where if I really knock it out the park, I can make three times my salary this year versus this kind of like 10k you know salary gap um but you know i guess like obviously not everybody cares that way or thinks that way but uh i don't know it seems like of of 100 of the population it seems like at least 20 of the population should be asking themselves those types of questions more often um in the same way that like before i met any business people i just thought like oh after college you go get a job i didn't think there were other options and only once i saw that there's these other options and that man there's people doing business they seem to be having a lot more fun and making more money like okay i guess i could go do that it's like you just sometimes need to see it or hear it and then it changes the way you think and that i think more people should see or hear the question of like how do i make three times more in half the time how do i make 10 times more total how do i have twice the fun on the same salary how do i twice the time on the same salary it's like there are just better questions you can ask yourself than the ones Although I will say one thing that I really miss.

1:27:22Do you guys remember we started that business called Buyer, where it was negotiation as a service? I thought that was an awesome idea. Amazing idea. Amazing guy who ran it, Kimia. We ended up selling it to Ramp. I didn't really want to sell it, but for Kimia, it was like his first big exit. So it made a lot of sense, and we're really excited for him. But I really miss that business, because that's one thing where I'm just too busy running my business to negotiate things. And when I'm buying a car or doing a big buy of furniture or a renovation or anything, I still want that. So I put this out to the audience.

1:28:00Someone needs to restart that business. Negotiation as a service. That's a great Nick Huber business. I agree. Are you going to make money on the stock of Ramp? Ramp does good, I think. We didn't take stock. We just took cash. Because for us, we could just take the money and invest it ourselves. so we knew we could get a good return within Tiny. Dude, these are the best podcasts. These are the best podcasts where we're just hanging out. I wonder if the listener prefers these where it just hangs, but I like those better personally. Yeah, that was super fun, guys. If you like it, compliment us in the YouTube comments.

1:28:33If you don't like it, well, you're probably gone by now. And that's the pie. Thank you.

1:28:47I put my all in it like my days off On the road, less travel, never looking back Hey, 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.

1:29:23You can do wires, invoices, cards, reimbursements, two clicks, and I'm done. If you're already using Mercury, respect. If you're still using one of the old big banks, I got questions for you. So go visit Mercury.com and give it a test drive. Mercury is a financial technology company, not a bank. Banking services are provided through Choice Financial Group, Column 8, and Evolve Bank & Trust members, FDIC.