You Have 70 Days to Win the Year

24:22I think I should have gone to a trade school or a state school. I think I should have gone to a$15 ,000 a year University of Missouri and explored versus going into debt of$150 ,000 to go to like a non-top university. I think that's ridiculous. Yeah, I think that's right. All right. I have one and you have a few. Which one do you want to do? Let's do a quick one on this Ken Fisher thing. I don't know how much I have to say. It just kind of fascinated me. So let's see if there's something interesting here. So I was at a breakfast and somebody was talking to me about a business idea that they were doing or that they had done in the past.

24:57I was like, man, that sounds like a good idea. Where'd you get that idea from? And he goes, oh, it's the Fisher Investments model. Of what's Fisher Investments? And he goes, oh, you don't know Ken Fisher? He's like, you got to look this guy. So I go down this rabbit hole. And who is Ken Fisher? So basically, he's a billionaire money manager. So he's my billy of the week. Big time billionaire. Like 11, 15 billion. Yeah, exactly. And he basically created a simple firm. So it's an investment advisor, money manager type of firm called Fisher Investments. and he grew it over the years to where they now manage upwards of$275 billion assets under management.

25:37So$275 billion with a B. They got 3 ,500 employees. And they ended up selling to private equity. So they sold to Advent. They sold, not the full amount, but they sold at a$12.5 billion valuation. And that was the first outside capital raise. So this guy basically bootstrapped his way to a$12 billion company. And the question is, how did he do it? What did he do? And so this guy's story in the, I guess, the simple terms is his dad was a finance guy. He actually wrote a book that was kind of popular called Common Stocks and Uncommon Profits, which, by the way, when I went to Monish Pabrai's house, I asked him to recommend four or five books off his wall.

26:19And that might have been one of them. I remember seeing it in his library. And Warren Buffett called that book a major influence on his career. So that was his dad. What he did was he left, he went out, and he started his own firm. And the key is this guy is basically a marketing master. So what he did was instead of trying to, I shouldn't say instead of, but like most people who are great with investments or money management, there's a certain profile of a person. And that person typically doesn't have incredible direct response advertising skills. By the way, it's typically the opposite. A lot of people who are in this industry are the opposite of extroverted.

26:56And they kind of want to be in a hole and just not talk to anyone. And they don't advertise at all. And so when they did this deal, some of the numbers came out. And basically, these guys are spending$60 million a year on marketing, which sounded like a ton to anybody else in the money management space. And to him, he was like, that's nothing. He goes, I get the question. Why do you advertise so much? He goes, because we have no market share. They go, you have over$100 billion in assets under management. He goes, that is nothing. Have you seen the size of this market? We're just the biggest grain of sand in the sandbox, but we're still just a grain of sand.

27:29We have 0.1 % if that. And so he said, we spend about 6 % of our revenue on marketing. So that's still not a lot. They spend 60 million a year. And so they're doing about a billion dollars a year in revenue. And he basically created this system of this marketing system. And so you can go watch his ads. And so I went and watched a bunch of his TV ads. And what he says is like, he's like, well, there's, we broke it down. So he's like, there's six mental profiles of people of how they think of their retirement and their savings and investing. And so they break out the six psychographic profiles. You have, you know, let's say that the grandma who just doesn't want to lose it all.

28:08You have the, um, the guy who's stashed away in his 401k and he's looking for, he thinks he should, he feels like he should be doing more, but he doesn't know exactly what, and He's pretty distrustful with most people, with people who come to him. And so they have these profiles and then they start running ads. They do focus groups and try to figure out which ads are working. And there's little nuggets along the way that they were like, why do you use your face in the ads? Do you feel like there's some risk with that or would it make it harder to sell the business? He goes, because we found that clients want to believe that there's someone who wakes up in the morning and gives a darn.

28:41That there's a person, not an institution, who cares? That's why we use my image. Because here's Ken. He's 68 years old. he gets up in the morning and he cares. That's what I need to convince you of. And then he talked about how they're like, what did you learn from your advertising? Because they're very scientific about it. He's like, well, one thing, for example, we learned that men's faces do better than women's. Everybody told us we should be using female faces. That's going to appeal more. Not in our testing. Our testing shows that men's faces are going to convert better than female faces.

29:08There's a famous ad where it's an outline. You know how the Wall Street Journal has photos of their authors that are like dots? It's like a sketch, actually. It's a sketch out of dots or whatever. He buys outbrain ads and tabula ads, and they would always see a dotted profile photo where you think it looks like a Wall Street Journal article, and then you click and it goes to Fisher Investments. And so that's how I first learned about him because I'm like, these guys, Fisher Investments, they're following me everywhere on the internet. So if you click one of those, they're great with headlines.

29:41So for example, you click one of those outbrain ads, those tabula ads, you're going to go to a page that's just a video. There's no navigation. There's no nothing. And the video is called Debunkery, Seeing Through Wall Street's Money-Killing Myths. And it's a 12-minute video that you're going to see where he debunks Wall Street myths. And this type of BuzzFeed headline stuff isn't what you're going to find from most money managers. Most money managers would cringe at that. They don't know how to do those. They don't have the team in place. You've talked about Agora, for example. He's basically Agora-ified money management by putting out really compelling, juicy content and then advertising it everywhere.

30:20So they spend a ton of money on ads. They're on Fox News or on Forbes or on Wall Street Journal, they're on MarketWatch. They're basically, they have this profile. They're like, we're looking for somebody who's got a$500 ,000 retirement portfolio. They don't want the get rich quick ad. And then you look at their ads and it'll say, want to retire comfortably? If you have$500 ,000, download this guide by Forbes columnist and money manager, or Ken Fisher's firm. It's called The Definitive Guide to Retirement Income. And then there's a picture of a guy on horseback. Like a dude who's like ready to retire and like get out of the office and be on horseback.

30:53Or he'll have an ad. Like I have one here. I'll put these up on YouTube so you can see the ads. But like his outbrained ad, it says, what does your net worth say about how you'll retire? So it's kind of like a personality quiz. Like what does your net worth say about how your retirement's going to go? And it's a picture of a man and a woman on a boat, like Titanic. it. This is so good. I'm looking at it now. I mean, like I want to show you this here, just I'm going to screen share this real quick. It works, by the way, because I have to assume that his product is good, right? Like, I don't know.

31:26We'll see. I don't have a strong opinion on that. Look at this landing page, though, designed for conversion. He's got the 15 minute retirement plan as a book and it's an arrow and there's a drag and drop like box. It's like, Where should you get it? Get it right here. Get my free quote, right? And then you got Ken Fisher below. Here's a white guy you could trust. And I just thought this guy's marketing is just excellent. I think it's to be studied. I think it's extremely effective, especially with the crowd that he's going for, which is kind of like the 50 and up crowd. So studying this guy's ad library was pretty insightful.

32:00And it also just brought up an interesting idea, which is a lot of people, when they're great at marketing, They go into spaces that them and their friends are already in, which is often like D2C, e-commerce, or marketing agencies. You're trying to be a great marketer in a sea of great marketers. I think what the genius of this guy is, is he said, how do I be just two notches above average at marketing, but go into a space where nobody knows anything about marketing? Or everybody is doing a very rudimentary playbook. And so that's where I think the opportunity is. like if you go do this in the senior living space, it's like the people who own and operate senior living businesses are not the same sharks that you're going to get trying to sell, you know, handbags on the internet.

32:44Because those people, the people who sell handbags on the internet, they're work class marketers. That's why they're able to sell, you know, a handbag for, you know, 10x the COGS. And the other thing is that when people see these ads, they think, does this work? I can't believe this works. First of all, yes, it works. It does. It works for everyone. It's not just like old, like you kind of made a comment, like only older people are into this, I think this always works. This type of stuff works really well regardless of the age. But when a brand advertising guru who lives in Brooklyn, New York, who wears Common Project shoes, they see this type of shit and they think, this is fucking lame.

33:20I should make my website look flashier. When in reality, a plain white website that has just long form copy of like 3 ,000 words can oftentimes, more often than not, convert better than a flashy website. Right. So let me read you the last few notes I have here. So he's been a Forbes columnist for 20 plus years. So he's basically content marketing, right? What we do and what we get a lot of credit for, which is like, well, you build an audience, you build a brand, and that helps you with distribution. This guy has been doing that for 30 plus years. He wrote several books. So he wrote super stocks and other ones.

33:51He has an army of salespeople that cold call investors. And they talk about this basement of cold callers that are just sitting there and people report that like, dude, I signed up for this free guide once I read it. And then they've just been badgering me for years ever since. And they keep calling me trying to get me to invest with them. He says that everybody else relies on referrals from other partners. They don't think about the broader world. How do we get people calling us? That was their goal. And they have estimated about$14 ,000 CAC. So it costs them$14 ,000 to acquire a customer. They spent just over$60 million on ads back in 2019.

34:29They're the 12th biggest spender on financial services. They have 60 plus thousand individual investors, plus then they manage another$10 billion plus from pensions, state governments, municipals, etc. They charge about 1%. 1.25 % in fees. So you could do the math on 1.25 % of$250 billion. And then it's hard to gauge the performance. they don't have publicly available numbers for everything, but in the past, Fisher funds with publicly available numbers have underperformed the market substantially. So they have a Purisma total return fund. It was a mutual fund that had 25 % return in 10 years. The S &P 500 index would have been 1 ,000 % in the same time.

35:12Yet still, some of the quote was, if his firm is not the biggest RIA, it's close. And so to build the biggest investment advisor firm while not necessarily having the best returns but being the best marketer is the story here. Dude, fuck podcasts. I want to do that. This sounds awesome, right? Of course, there's a billion reasons why it's a pain in the ass to run just like everything else is but that sounds great. Dude, I've been watching Better Call Saul. Do you ever watch his show? What? You want to become an ambulance chaser? Isn't he just a lawyer? No, he's a lawyer but one of the things they show him doing is him making his commercials and his ads to try to be Better Call Saul.

35:56It reminded me so much of this Ken Fisher playbook. The show makes it seem... The hustle he does to create these commercials is also very fun. He's nailed the branding. This is cool. I've seen his ads all over the place, and I knew he was big. I didn't know they got acquired, so I wasn't able to ever see any of the numbers, but that's amazing. Here's some of the... I think this is his own reporting of his performance. 2007. He says, if you bought... This is not their funds. This is his recommendations, but if you bought all 60 of my recommendations, you'd be up 0.9%. And assuming you lost 1 % transaction fees, the S &P 500 is down 0.5%.

36:31Okay, so nothing big. 2008, he says, how were my results last year? In line with the market, which is to say, not good. That's what he said? Yeah, 2009, I made 65 recommendations. If you put an equal sum in each, you'd be up 44%. Stock market's up 20.9%. 2010, he says, your return is 18 % versus 12%. But these are his stock picks, I think, from his Forbes column, which is not the same. That's his entertainment. Well, if you have an wealth advisor or whatever this stuff's called, if you have an advisor who promises to make you more than the index, they're lying. But then what is the point of the advisor?

37:08The point is that as you grow and get older, it's savvy to think, all right, I need to get less stocks, more bonds. And those mature are sometimes 6, 12, 24 months. So it's like the buying of those, if setting up an estate plan, there's a bunch of administrative stuff that often, but not always that 1 % can kind of pay for itself or like help you. You could also say that they are kind of like a therapist. So when you want to sell stuff, they're like, dude, don't sell it. Don't be an idiot. But there's a bunch of administrative stuff, but outperforming the market is not the main value. And if you have an advisor who says that they're going to outpick, then they're foolish.

37:46by the way do you know who else does this is motley fool so the motley fool they have a a fund that has well over a billion dollars and it started as a stock picking newsletter and now they branched out to having a fund and so they actually have a wealth advisory business that is massive and it was built up the exact same way as ken fisher yeah it's pretty crazy you said a billion dollars this guy's over 250 billion so somehow motley fool which is like also excellent at online content and probably has way more traffic does not have anywhere near the same assets under management, which I think is always interesting to look at.

38:22When two people pursue the same strategy and one gets a 100x return, sometimes you point to luck or timing or other things, but often it's a business model choice, it's a strategic choice, or it's an executional point that's different. Yeah, this is insane. Money flow is 1.5 billion. can I tell you a quick story about related to something that Elad Gill said yeah so he made a comment where we asked him like what he's interested in and he said monuments and so what he meant was like an example of a monument is the Statue of Liberty or in some ways like the Eiffel Tower like things that like exist mostly to bring pride to a country but then also act as like a tourist destination and he was saying you know why don't we build more of these?

39:11What happened to the monuments was sort of the question. Yeah. He was like, look, when we were up and coming, like we loved building monuments and like, it gave a sense of pride and it was like good for like, it was like very pro America and it got people bought in. And I had a guy listen to the podcast and he sent me the deck that he's trying to raise money for a monument that's based in San Francisco on Alcatraz. And so you have to see this. So it's a picture of, first of all, I don't know who this, I've never heard of this person, but you know who Prometheus is? He's like a Greek god. And it's basically like he represents the spirit of innovation and courage for the purpose of building, for manifest destiny, for inborn nobility, which elevates humanity.

39:50They want to build a massive statue of him that's 350 feet tall. And it's on where Alcatraz is. It's like if the Statue of Liberty had like a hot boyfriend, this would be him. Yes. And that's exactly what it is. On the other side of the country, he's just holding up a torch just like she is, except for he's absolutely ripped and he's from the movie 300. And he's got like a Speedo on. It's basically a Speedo. And he's packing, to be honest. They did not pull any punches as far as the amount of stone and steel that's going into this guy.

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41:27Mercury is a financial technology company, not a bank. Check show notes for details.

41:34and so first of all i've got to say the obvious that there will never be a statue that touts manifest destiny and inborn nobility and the spirit of courage that's going to sit in the bay of san francisco that the like all the like a shirtless rip dude none of that i think will ever happen but the idea is actually interesting and so what they want to do is they what are raising$100 million to build the statue on Alcatraz. And so it's 350 feet. But in their deck, they talk about the money or the revenue and profit of other people, of other statues. So listen to this shit. So the Statue of Liberty does$154 million a year in revenue,$70 million a year of net income.

42:20And then you can go down to Pearl Harbor. Yeah. I mean... So Statue of Liberty. Let's say that again. That's mind-blowing. So Statue of Liberty, you said$70 million of net income,$150 million of revenue. So 50 % net profit margins on 4.5 million visitors, each one paying$25 a ticket and$10 of concessions. It's insane. That's wild. It's insane. And then it goes down to Mount Rushmore, which is on the smaller end, which does$50 million in sales and$20 million a year in net income. or Pearl Harbor. Same thing. 50 million, 23 million. Dude, I was laughing. Why are we not doing this? These are amazing businesses.

43:00That's my point. And so I went and I saw these numbers and I'm like, that's absolutely ridiculous. And it's like amazingly good. And of course, with all things related to like investment decks, you know, you paint the best possible story and who knows if any of it actually is true. There's also no source cited on this. There's no source. I looked up some of the stats and like the Statue of Liberty numbers. It kind of checks out where it is plausible that those are the numbers. But they're raising$170 million to build this. And their goal is to make$100 million a year in profit. That's what they say the numbers are.

43:35And so you start doing the math. And like I said, this is all just some guy drawing this up. And who knows? This is painting the best story ever of a thing that doesn't exist. But the math is somewhat interesting behind how this all works. and saying there's a chance yeah so they're like if we do this we're doing 94 million dollars a year net income and so it's actually pretty interesting that like monument of course dude you're not going to like be able to build this in san francisco they're not going to have any part of it how much have they raised so far do you know no in like when i was googling it they have like a sub stack and they say things like joe lonsdale is on board and like all these like uh amazing people are on board and they're have a sub stack documenting uh what they're talking about, but I don't think I saw that they said how much they've raised.

44:22I think it's cool that people are doing this. I guess I have a few thoughts. I think it's cool that people are doing this. I hope something like this happens. I am stunned at the profitability of these other monuments. That is my golden nugget for the pod. That is amazing. Noted. Okay, noted. There's something here. This deck, by the way, does not look well made. And I think if you're going to try to pull something like this off, you have to also, like if you can't pay for a designer, for your deck, then I'm not sure I believe that you're going to do this. Yeah, yeah. Like, this is, I wonder how, like, I like when they're going to bed at night talking to their wives, I wonder if they're, like, saying, like, isn't this hilarious that we're trying this?

45:04Or is it like, when this thing's built, we're going to be doing it? You've got to fully believe that you're doing God's work out here. Yeah, and it could happen. So it's called, if you want to look it up, I've got no affiliate. I've never talked to these people. It's called the American Colossus Foundation. Kind of funny. Yeah. I think you're right, though, that location really matters. You have to go somewhere that both has can be a tourist destination, but you need the approvals, right? You can't just get stuck in limbo, and San Francisco Bay Area is probably one of the harder places to get approval for something like this.

45:38Dude, San Francisco is the antithesis of a ripped, like, a ripped, like, alpha-looking heterosexual male. like this is like not like I lived in San Francisco for 10 years this is not exactly what the culture is about so I think do you remember the art we had on the wall the giant painting we had on the wall in my office at Monkey Inferno where it was the reverse of the evolution of man evolution of man is like it's an ape and then he's like standing half upright then he's fully upright then he's walking and then it's like you know that's the homo sapien today and the thing we had on the wall was the homo sapien and then it's him bending over looking at his phone bending over sitting basically sitting down at a laptop and then typing and it was like a coder at the end of it and it was like that was the final evolution.

46:23It's the opposite. That's what should be the monument in San Francisco. Yeah. It's like a giant neckbeard. Yeah, wearing a hoodie. Not a jacked Greek god. You want to do one more thing? Yeah, I got a few quick hitters. Okay, let's do this one. So talking to bankers, I think this is a good value add. This is a pro tip life pro tip for any founders out there. I didn't know this when I first started doing startups. I had no idea. And only the first time I ever came into contact with a banker was when I tried to sell my company. So I was kind of like eight or nine years into doing entrepreneurship.

47:05And even then I didn't know what a banker was. Somebody said, I'll introduce you to a banker. And I thought that's the guy at Wells Fargo that like sits in the back, not in the front. Like I didn't And I didn't really understand what that meant. Turns out a banker is like an investment banker. There's somebody who can help you sell your company, raise capital, get debt, that sort of thing. And they come in at a certain level of scale. So usually something like$30 million and up, really they try to be like kind of like $100 million company or so. And I had a friend who was a successful entrepreneur and he told me something that really stuck with me.

47:37He goes, I was like, oh, when do you think you should talk to these guys? Like, you know, and I was thinking, meaning like... When you're ready. Yeah, like when I'm ready, like at the very beginning of when I'm ready or do I need to have all my stuff together? And he goes, the best thing I ever did was I talked to a banker a year before I wanted to sell my business. And I talked to them and I go, a year before? What do you mean? And he goes, yeah, because I went to the banker and I said, if I wanted to sell my business today, what would it be worth? Would it be able to sell? How strong would this asset look like in the marketplace right now?

48:06And they know all the deals that have gotten done. So bankers are in the process. The bankers are in the middle of selling companies just like yours in your industry. So you go to a banker that's in the industry, they've seen everything that's traded, they know the relative strength, they know the valuations that they're trading at, they know who the buyers are, they know why that they're buying. And so they can give you a really clear picture. And he goes, I went before I was ready because I wanted them to tell me what would cause this to not sell? What would be the weak points of this business?

48:32So that became my roadmap for the next year of what I needed to fix. That became my priority list so that when I did go to market, I actually had those things fixed. And if I hadn't gotten that feedback at that point, I would have just got that same feedback a year later and it would have pumped at the kid way down the road. They're going to tell you that shit regardless. And so it's nice to know early. And so I think bankers are actually a pretty big cheat code, not just for selling your case. So that was the first thing I learned. Second thing was you can actually talk to bankers before you even go into a space.

49:00And I think you've done this before too, which is you go to a banker who's in a space that you're interested in and you talk to them about the companies that have sold. And you're like, what companies have sold? How are they doing? What was their strengths and weaknesses? Who are the buyers? Why do they buy? The question is basically, what's the profile and attributes of a business in this space that outkicks the rest of the... That performs better than the other ones. So tell me all those attributes and those strengths and weaknesses, and I'm going to just do that. Exactly. You can reverse engineer.

49:33Maybe you can work backwards from that and find a great business. So I did this with a recent business we haven't announced yet where we first talked to bankers and we learned from that, oh, that validated a lot of things we already liked about the business idea. We had an idea, talked to the bankers, that kind of co-signed or stamped that, yes, this is actually an even better idea than we thought, meaning it traded for much higher multiples and the business could be like, we didn't have to do A, B, and C. A and B were going to be more than enough to have an outstanding outcome. They also told us, on the other hand, so for example, here's my five questions for bankers.

50:05I go to bankers and I say, what deals have gotten done recently? So that's the first question. Number two, which ones, like you said, outkick the coverage? So which ones traded at the highest multiple and why? What was the unique about those? Was it just simply timing or was there something that they had in there, the way that they did it or the cost structure that made them particularly attractive? Then the third question I ask is, what deals didn't get done and why? So meaning what deals couldn't cross the finish line? What were the big red flags that stopped people from buying the business?

50:33Because you want to basically know those two. Fourth question, who are the buyers and why are they buying? So basically every buyer has a plan and you want to know, are the buyers only strategics or are there private equity folks? Are there independent sponsors? Who are the potential buyers? And then what's their game plan once they buy it? Oh, they're buying things at a$5 million EBITDA number for 7X or 10X. And then they're rolling up five of those and they're trying to get to 25 million and they're trying to trade that at 20X. And okay, that's their game plan. Gotcha. And then the last one is, if my business did XYZ.

51:07So this is the useful one when you're not ready yet. But I basically say, hey, here's where we're at today. Here's where I think we're going to be in a year. If this is what my business looks like a year from now, what do you think it would trade for and why? And getting that from four or five different bankers really helps triangulate a space. So last week, I spent maybe seven hours on the phone with bankers doing this process. and I feel like I learned more in those seven hours than I would have in seven months of just operating my business. It was so clarifying how to do this and it just made me realize, man, more people should do this.

51:42I'm going to come on the pod and at least say it so that for the people for whom it's applicable, which is I would say, you're an entrepreneur looking for your next space and you're not just being driven by some passion or calling. You are doing it more analytically, let's say. This is a tool. Or if you're a business owner and you want to sell someday, and you're at a few million dollars of your profit minimum, go have this conversation. I'm so on board. I've done this a bunch of times and I think it's so smart. I think that there's this idea in Silicon Valley, there was like this trick question when you're raising funding from a VC and it says like, what's the outcome here?

52:20Like, what would you sell for? And the answer that everyone pretends... Over my dead body. Yeah, I would never sell. And the answer, like the answer absolutely can be like, I'm going to sell. But the answer probably should be like, well, I don't know. Maybe we will, maybe we won't. But like if we get to these numbers, we can sell for this or we can IPO. Like the idea of like, I have an exit in mind has been told to us that that's silly. I think that that's silly. It's a very Silicon Valley thing because for two specific reasons. One, all venture capital is predicated on the idea that you're going to drive this to a billion dollars plus.

52:56So if you show any weakness, any hint that this guy would sell for less than a billion dollars, like if he got an$80 million offer that would change his life, he'll take it. Well, then this is not a good investment for me because I'm taking all the risk of failure. But I need to know that if this succeeds, it can be a billion dollar plus. And one of the risks of it being a billion dollar plus company is not just that the business works, but that this founder will hold on and they will resist temptation. So Silicon Valley investors, because of the fund math, they need that. That's why they put their values on you and say, whoa, those are your needs.

53:29That's cool for you. That's not my needs necessarily as an entrepreneur. That's the first thing. The second thing is there's an ego, pride. It seems noble in some way to say this is my life. This is my life company. I'll do this for 100 years. I think we're going to dominate this space so much. It just sounds so cool. It sounds so brave. By the way, I think you can do that and also this. So there's this book that I love called Built to Sell. Have you ever seen Built to Sell? No. It's a popular book, but here's the premise, which is like, you build your company to sell because building a sellable business means you may or may not sell it, but you have a company that operates well.

54:04And what does Warren Buffett say? He says, build your company so an idiot can run it because someday an idiot will be running it. That's kind of the premise here with built to sell, which is like, you're going to build your company to operate well. And so I think you should build your company to exit regardless if you're going to exit or not. I agree fully. I guess what I'm saying is, and that works for us because we don't raise venture capital for our businesses anymore. We just own them ourselves. But a lot of the advice you get is still from VCs because they're the loud people. They're the people who are famous.

54:34So you sort of take their advice even though you're not actually in their game. You're in your own game. And so I think that's a very, very important distinction. The other thing, though, is it does sound cooler to say I would never sell this. I sell to Amazon. I'm trying to buy Amazon. Right? Why do you love your boy, Brett Adcock? Because Brett Adcock is all bravado. He's all chest, right? He basically will say, we're going to change the world. We're going to build a trillion dollar company. Anything less than that, what's the point? And you're like, oh my God, it's intoxicating, as Sam Parr would say.

55:05It is intoxicating to be around somebody who is going only for the big shot and is not saying I'm building this to sell or that there's a path here to a$350 million exit, which will 7x your money. He doesn't talk like that. and because he doesn't talk like that, it is very attractive and it is very admirable because many of us wish that we could be as hardcore and brave and bold as that. We're just not. And by the way, I don't think you have to be. I don't want to play that game. But when you do see someone play that game, it's cool. I gotta admit, it is cool. Yeah, I agree. I agree. It's cool.

55:38I agree. And I've invested in a couple, like Brett Adcock, I invested in and he has this attitude and I like that. By the way, now that you have friends that are VCs or, I mean, you you sort of were one for a minute. Isn't it funny how you talk to them about your company and raising capital and you'll say, no, we don't raise capital. And when you're friends with them, it's like, that's the right move. You know what I mean? When you're not friends with them. They'll give you a low five. They'll hit you with a low five real quick. Yeah, they say that's the right move. Now when you tell them that and you're a potential client, they say like, oh, that's cute.

56:16That's a lifestyle business. That's good for you. but when you're friends with them they think to themselves or they'll say like smart the irony of the VC thing is a VC does the opposite of what they want all the founders to do so they don't go all in on one idea they have a diversified portfolio they they are not you know sort of only looking at the upside they make a ton of money in fees right so they you know they're going to whatever when somebody raises money so for example what's the podcaster Harry Stebbings Harry Stebbings just raised a 400 million dollar fund that's amazing. That's incredible, by the way.

56:53Harry is going to make $80 million guaranteed in fees. Just fees. He could be the worst investor in the world. Why? Because he's going to make $80 million because he's going to make 2 % a year on$400 million. It's 20 % over the life of a 10-year fund. So just do 20%. $80 million in fees guaranteed. That's his floor. Who cares about the upside from there if you're Harry Stebbings, right? All you got to do is Keep the game going and maybe raise another fund. That would be amazing, right? So VCs, while they want you to be all in, and they want you to live on scraps, and they want you to have no diversification and stay super laser focused, and they want you to go ride for the big upside, they themselves have a very different picture of risk, which, by the way, I think is a smarter picture of risk.

57:40But it is just funny that that's true. It's funny that the person giving you that advice is literally doing the exact opposite with their own finances and portfolio. That's insane. And by the way, they're not wrong because they're saying, oh, you wanted to play the Mark Zuckerberg game? Then that's how you got to play. So then they are giving you the right advice for you if you want to be doing that. The$80 million fee thing, I never knew that. I mean, I knew that they get, what is it, 2 %? When do you do the math? Well, 2 % is misleading. It's 2 % every year off the top. It's the same reason why financial divide, we talk about Ken Fisher.

58:10Oh, 1%, that's not much. 1 % of your entire net assets every year off the top, regardless of performance is like one of the great sort of seven wonders of the world. That's the eighth. It's like the eighth wonder of the world is that a 1 % off the top fee every year is actually, it becomes a gargantuan number over 10 years. And so that's the same thing with a venture fund like this. Dude, God bless him. God bless America. I guess he's not even in America. He's not in America. That's the best part. They need to put a monument of Harry Stebbing somewhere for raising a$400 million fund and$80 million in fees.

58:44It's the$80 million monument. Oh my God. That'd be great. That fun thing or that monument thing is ridiculous, right? This monument thing is fascinating. We got to, I got to go look more into this. This is great. Great episode. All right. That's it. That's a pod.

59:24Hey, 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.

59:54If 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 8, and Evolve Bank & Trust members, FDIC.