How Ecommerce CEOs Actually Pay Themselves (Real Answers)

21:14Sean Frank:Traditionally, there's two paths, CFL or COO. I think in the Fortune 500, there's probably two current CEOs that came through a marketing track. So, you know, and if you're a tech company, you can come from the product side or the CTO path, but like I'll say internally, he's our COO. So like that's the path he's come up through. I think in consumer increasingly, it should be the CMO. I think marketing is the most important function in the modern digital brand. But just there's not a lot of clear examples. Or product sometimes, Sean. I mean, You can make the argument that Jobs was really like, I mean, he founded the company, but if he'd come up through the company, he probably would have come up through product with the way that he thought.

21:59Sean Frank:Yeah. And John Ternus, right? So I think if you're a tech company, I think through product, through CTO, something like that. But if you look at the Fortune 500 as a whole, it's going to be COO and CFO. I think Target just named their new, or I believe it was probably a year ago, and it was the COO took over as the CEO role. So it's like, that's, that's the traditional path.

22:20Matt Bertulli:You know what, if you guys ever want to ask him, I mean, this is just fun. I just did it. But like, if you get, you can get a list. Thanks AI of like large privately owned companies that have been around for decades and are owned by families. The list is actually really impressive. You've got like Cargill and Coke and Mars and Bosch and Aldi and Ikea and Bechtel and Cox, like names that we actually do know. Right. Like most Americans would know these names. These are, some of these companies have been around since like the 1930s.

22:49Sean Frank:Yeah. But you know, the big thing that that list has in common, there's a lot of European names on there.

22:55Matt Bertulli:A lot. Oh, dude, Ferrero is a great one, right? Barilla is a great one.

23:00Sean Frank:If you guys ever want to see, I mean, or go down a really crazy rabbit hole, like the ownership structure of Ikea and like the way that they keep that as like a privately held asset, it's pretty nuts. I mean, that business is really, really big, like$80 billion a year big. It's like one of the biggest companies. Rolex has a similar one, Sean, where they have this kind of foundation piece. Yeah. And so as an example, that's probably more my jam, right? That there's a foundational component. There's a big giving component. Another piece of this for me is that I just want optionality because I've got two kids and I'm like that are 11 and 14.

23:40And I'm like, maybe I could see both one or either of them wanting to help run the business or, you know, be involved, but they're also too young to be thinking like that. So I just want to keep my options open. Okay.

23:50Sean Frank:I'm glad we're having this conversation. Before this podcast, I had a call 30 minutes ago with a big strategic in my space who was privately held. And his grandfather started the business, then his father inherited the business, and now he runs the business. And this is a multi-billion dollar a year business. and I was talking about this because he just had his third kid and he's got two siblings. So he's like, look, he's having this conversation right now. He's like, how do I set up the structure when it was so easy? It was my father and then his father. Now there's going to be nine kids. How do we make sure this thing doesn't get ruined?

24:25So maybe a different episode for a

24:28Sean Frank:different day, Mike, but thinking about foundational structures. Maybe it's too niche of an audience, but I'd love to hear about it. I don't think so at all. I think that if you're involved with really big numbers so this is a kind of hobby for me i don't know if hobby is the right word but it's like a thing that i've devoted some time to talking to exceptionally wealthy families where the patriarch kind of started a business and now they're at generation three because the the thing that i really want to understand is how did they structure the business how did they structure the money and how has it turned out and what they learned through the process and the reason why i want to talk to people that are old enough that they've got grandkids is that it's given it enough time for them to understand kind of the ramifications of their actions.

25:11And it's very similar to if you talk to wealth managers, the type of people that do estate planning and stuff like this. And what you really learn, and this is what most people who are kind of in the process, I think, of going after money don't think about, is the obtaining of money is actually, in my mind, a lot easier than stewarding that money well and making sure that money doesn't burn your family to the ground. Basically, this is what I've learned from all of these things. And so you should spend a ton of time thinking very intentionally about these things. It's great if you have a successful business and it gives you a lot of options, but also there's real peril that comes with that.

25:50There's trade-offs. And so I've actually spent a lot of time trying to figure out like, hey, how do I prevent the success of Simple Modern from making my kids and my kids' kids miserable. If you look at, I think it's the Vanderbilts. It's just insane the way that that family - A gross story. Yeah. I mean, the wealth just burned the family to the ground. It was all gone. He was the richest man in America or second to Rockefeller. And by the time they were in the third generation, it was all gone.

26:20Matt Bertulli:Yeah. Anderson Cooper is the first successful Vanderbilt in like 200 years. And it wasn't even just that the money was gone. It was like, and it made them all miserable. And so I think I, it always comes back to me to the thing I always say on the show. It's like, you can't even talk about how to be successful until you understand what you're aiming at. And once you understand what your goals are, so like, even if you're talking about how do you pay yourself, it's like, well, what are your goals? You know, like, so for me, I want to be able to, I want to be able to have priorities outside of the business.

26:50I want my family to be healthy and my kids to have good lives. And, you know, I want to be proud of, of like what the company does and I want to empower other people. And so I'm going to make decisions around that. And that might be really different than Sean or Matt. And that's okay because I have my own success criteria. I would say there's another famous story in the e-commerce space.

27:08Sean Frank:This was during the COVID boom. Guy had an accessories brand. He gets approached by a strategic to buy him and he goes, I want a billion dollars. The company was doing about like 60 million a year or whatever. Then like the strategic was like, okay, we'll make the case for it. We'll see what's going on. He ended up getting into a horrible deal because he missed projections. It was predatory. He needed money. He needed a loan. And it's because in his mind, he's anchored. He's like, I need a billion dollars. So we just rambled a lot. If you could take away one piece from this, it's understand what winning looks like, understand what success looks like.

27:41Sean Frank:And I would say this, get your first million dollars as fast as possible. If you have to sell the whole business or take distributions or do whatever, get that first million dollars and then really build that roadmap like Mike's talking about. Understand where you need to go with your earnings and what's your dream outlook? I'll build one more concept on top of it, that scarcity is good for us and constraints are good for us. There's a new book that's coming out that talks exclusively about the really positive side of scarcity and constraints. and the like we were really undercapitalized early on as a business and it helped us to make much better decisions and grow the muscle of being really strategic in our decisions because we just didn't have very much money but like the same is true about your personal balance sheet a lack of scarcity breeds laziness it breeds investing in things you shouldn't uh invest in it breeds uh getting soft right like all these things are true and so like there's also a reason why i haven't taking out$50 million or whatever.

28:42Cause it's like, I think it would be a net negative on me. I've got enough to live. I've got enough to do very nice things, but like, I'm not trying to take out so much that I get fat and fat and happy because that really, that that's a real thing. So I don't know. I'm, I'm a believer in like, I try and have goals that I can't quite reach and that I have to work towards. And I only take out enough to kind of, for what I need right now. If you're scaling an e-commerce brand today, ads alone aren't enough. After Sell focuses on the one moment that every brand already owns after checkout and turns the post-purchase moment into more profit.

29:19Monetize every order with post-purchase offers and thank you page experiences without disrupting checkout or hurting conversion. Enterprise-grade tech used by Gap, Ticketmaster, Macy's, and Target now driving results for brands like True Classic, Hexclad, Ridge, and Jones Road. I would know. This is the reason I ended up buying three pans from HexCloud instead of two. Aftersell has already generated over$1 billion in additional revenue for e-commerce brands, revenue that doesn't require more traffic or higher cap. So check out Aftersell and tell them that the operator sent you.

29:52Matt Bertulli:I got a few things on this. I think that, Sean, what you're hitting on first is an understanding between, I would say the framing is financial security and then financial freedom. So like the goal is, I think, get to security as fast as possible. Security being like, it's very hard to get knocked out of the game personally. Now freedom is like the, the, the movie quote, like the FU number. Right. So it's like, it's enough money that like, nobody can ever really tell you what to do. And those, those are different based on where you live and what your goals are and all that stuff. But I would say like, that's a simple framing.

30:26Matt Bertulli:it's like security um you know and then freedom and i think mike for me like what i'm taking from you is is that if you i would be very conscious of this like and i've seen friends that get very wealthy that it is actually a net negative and then i have friends where they get very wealthy uh and then the opposite side of that is they've put a lot of effort into keeping sort of like drive and discipline alive so that it doesn't actually net drag them down right so like they tend to these are the jackasses who and i say that endearingly because i might be one of them that like sign up for triathlons and and like they wind up doing other hard things in life to keep them from getting soft um and i guess my third thing my takeaway from you with this with you guys i don't know how many people you know like this but in my i guess in my life right now a lot of people have sold companies over the last 10 years.

31:22Matt Bertulli:Inevitably, there's like two common things I hear from both of them always. One, I shouldn't have done that. It was valuable just owning it. And two, I really missed having cashflow in my life. It's that simple. It's like, they might have a hundred million dollars in the bank. They're like, but I got no cashflow, man. And it sucks. Money only goes out now. So I think there's like dynamics to all of this that you just to be aware of. Yeah, for sure. And I guess to bring us all the way full circle with what we're talking about, if you're an owner operator, you should pay yourself a market salary.

31:55I think it's good to try and build toward distributions, but you should keep money inside the business if you can make really good investments and having some kind of a balance is a really great place to be where you make a really good salary. And then also you have this asset that you're working on every day that's paying you some additional money as distributions. And I just, I've loved being in that situation. And I think if you achieve that, it's great. And you have maximum optionality about where you want to go from there.

32:24Sean Frank:And I'll just say a good rule of thumb, 1 % of top line revenue as a salary for CEO replacement up until about 500 grand a year. And then it's 500 grand plus bonuses equaling probably 500 grand. Sean, how do you think about compensating your president who, or you're kind of, you said he's your CEO right now, but you're kind of president and waiting position. How would you think about that? The hardest thing is how do you keep someone around for years, right? Like, you know, he's been here three years or whatever. I might not be ready to move on in three years. So like he has to have enough salary to, you know, float whatever life he is.

33:04Sean Frank:Also, this is somebody we recruited who was already a COO. Like, so i had to overpay basically to get this person in the door um and then he has a strong comp package in terms of bonus so like you know he could he could be the second or third highest paid person at the company including his bonus we have lawyers and lawyers make a ton of money and then he has a multi-percentage point ownership interest in the business so like the hardest thing And the reason why family businesses work is because your kids, you're from a very young age, they know that they have to shepherd this thing, right? Like that's how European companies do it.

33:43Sean Frank:How do you build a structure to hire people to manage that business? And as much as you hate public companies or, you know, like you might not like the large scale companies that like you have to interact with, the public shareholder interest that we have in America does a great job keeping companies on the right track, right? it's very rare to hear about, you know, CFOs stealing money or running off with drugs or whatever. And it's because there's a lot of structure put in place. So that's the reason why a lot of these companies go public is because just all of the extra scrutiny that goes with being public.

34:17Sean Frank:But how do you do that in a private company? It's like you have to build trust over years and years and years. So that's the way we had to do it.

34:23Matt Bertulli:Mike, I am then curious, because Sean brought up the, you know, you need to know what you want. You've mentioned it. I would like to know if you are thinking sort of like long game, like what are the ultimate goals for you? Like just personally. And then Sean, I'd really like to know, Sean, how you even beyond Ridge, like you're in this game of business and you're, you're like in your early thirties, but you're so young in this game. So maybe Mike kick us off because I, I love this topic. It helps to have avatars, people that you can look at and say, not necessarily, I want to do exactly that, but I want to draw inspiration from that.

34:58And I think there have been several families that I found that from. I don't do great. I'm not at my best if I'm not in community and if I'm not working on problems. I know this about myself. If I were to abstract completely from the simple modern business, I would just go look for other problems to work on. And as I've had more flexibility, I've been able to work on the podcast. I have several businesses that I advise for, but knowing that about myself, one of the ways that the company I've created adds value to my life is it gives me interesting problems to solve with people I like being around.

35:31And that's really valuable. So, okay, that's an asset. And that's something I'd want to be true, probably not just for the next three or four years, but probably for the next 10 or 20 years, unless something were to change that I can't foresee. So, okay, that's a value add. I really am committed to philanthropic giving. And I love that I can do some of that through the company and it makes it possible for me to give outside the company. And I'm one of these types of people that's like, Hey, if you can make money and you like to give money away, you should try and make as much money as possible.

36:03Um, I think we live in a culture where it's like, Hey, make as much money as possible so you can buy the most stuff. And I don't subscribe to that, but I do think like, obviously as Sean said at the beginning of the episode, like you can do a lot of really positive things with money and i'd like to make a lot of really positive impacts so i'm pretty motivated to keep building businesses um and then you know from a personal lifestyle perspective i guys i already have a great life like i love my family my favorite thing to do is to spend time around my family i have a lot of great friendships and a lot of great community i live in this awesome house that i built that i don't have any debt on and so like i think i've kind of like already basically maxed out the kind of lifestyle thing.

36:45And I found that it's actually shocking how little it takes for that to be true in my life. And so I'm much more concerned now with, okay, what's it look like for this to be great for my kids? What does it look like for me to be engaged in philanthropy and making an impact in a lot of people's lives? What does it look like for me to be able to have something to work on, you know, problems to solve, puzzles to solve on a day-to-day basis with people I enjoy. And I think the one thing that I want more of that I've decided I want more flexibility with is that I want to be able to kind of roam around and pick the puzzle each day.

37:18I don't, I like it when no day's the same. So that's probably the piece of flexibility that's unique to me because I own the business. It's like, Hey, I can, I can bounce around to our different business units. I can go advise another business. And you know what, if it's Wednesday and I just want to do a podcast or I just want, you know, to take my wife to lunch for three hours, like I can do that. And so the last piece I would just call agency. I want to live as high an agency life as you possibly can. And the business makes it possible for me to do that while also maintaining these other things.

37:48And it's usually mutually exclusive. Like I either have like interesting problems to solve and things to work on, or I have really high agency, but you can't have both at once. And I'm trying to figure out how to do that.

37:58Sean Frank:Mike, how old were you when your parents or how old were your parents when they paid off their house. Gosh, I don't even know, Sean, probably probably their 50s, 60s. I don't know. Outside of the entrepreneur community, you have to remember people have mortgages for 30 years. You know what I mean? So they could be 30, they're going to be paid off the house until they're 60. And if you can speed run, this is why getting the first million dollars is so important. Matt did a great job calling it financial security. It's like, just pay your house off. Because if you pay your house off, if you have no debt and your house is paid off, you could work at Starbucks and survive.

38:34Sean Frank:It's like housing is so expensive. So it's like that's the box I'm talking about checking. Just get to the point where you have no mortgage. Everything becomes a lot easier after that. Well, and I just will say one qualitative thing that I've observed. And that is when you have a lot of money, you start to think that that's the tool that solves every problem. And what you start to find is it only solves a few problems, really. like if I want something to do there's a million ways I can do that that don't involve spending money that are going to be deeply satisfying but if I have a lot of money it's like oh you know I got to pick something that you know spends a lot of money like I'm going to fly private somewhere or something and I think that that's one of the ways that you can get turned upside down by wealth is you just start thinking well I have all this and I've got to use it and it must be the tool for any challenge or problem I face and it's just not true.

39:24Matt Bertulli:long-time sponsor north beam is launching incrementality later this quarter this means that you can now have the trifecta of marketing measurement all in one platform that is multi-touch attribution media mix modeling and incrementality holdouts all inside of north beam you can automate that lift testing end-to-end unify results with your mta and your mmm this is a lot of letters but if you know you know and you can start to cut what doesn't work and you can scale what works you can do this all with confidence. This is why this is such an incredible ad to Northbeam. Northbeam's incrementality measures what results marketing is actually generating, not just what they're claiming credit for.

40:01Matt Bertulli:As a CEO, that's like music to my ears. Sign up now and you can lock in 50 % off unlimited tests for the year. Yes, the hammer nail thing. Like, unfortunately, it does that. You know, Sean, the, I want to just go back real quick to the pay off your house thing. There's a lot of content and discussion on buying a house, renting a house, like should you pay it off? Is that good financial advice? This is such a hot topic on the internet, but like speaking specifically to entrepreneurs, I have long maintained that while, and especially in like these low interest environments, and we're still in a low interest environment, let's just call it what it is.

40:41Like it's not that high relative to history.

40:45Matt Bertulli:If you're an entrepreneur and you don't have a mortgage, that's a good use of capital because like that is literally sleeping at night when you already take so much risk in your day-to-day life you know like don't listen in my view i tell people all the time like do not listen to the people that say like yo no you should just invest the money have a mortgage take the spread between the interest and what you would make you're still not going to sleep better and as an entrepreneur like i would take the sleep all day long i would take on this to just say that like my the house that I have is kind of like in my mind almost like a trophy it's like hey I worked really hard on the business and I was able to buy this thing and pay for this thing and so it feels great it feels great like hey here's a concrete reminder I'll give you guys another analogy so like I'm really tight with the thunder and they won the championship last year and usually the way it works is like everybody on the team gets a ring and then like some of the support staff and some of the organization and so like as a thing they did for a few people that weren't on the team they they they gave out rings and I don't know how many of these made.

41:48Maybe they made 10, maybe they made 50. I don't know, but like they gave me a ring. And so like, how much is this ring worth? I don't know. Like, I don't know how much it costs them for the materials, but the point is that they chose to give it to me. And like, so that makes it really valuable. And I just think, I think that it's kind of the same kind of concept with, with the concrete things, Matt. Like when you turn everything into an, like a return on investment calculation, like you missed the point about how we work psychologically, right? Like you said, my wife, the fact that the house is paid off and we don't have a mortgage makes her sleep great.

42:19And it's like, well, what's that worth? That's pretty much priceless for me.

42:21Sean Frank:It's worth a lot. Well, I just want to say, Mike, you've just moved up two full notches in my belt. You're so much cooler than I let you have an NBA championship ring. I mean, look at the size of this thing. It's freaking huge. It's hilariously large. It's so big. It's so big that the real ones that the team got, this opens up and there's a smaller ring inside of it. because you can't wear this. This is like multiple fingers big. At one point, Matt said you should pay off your mortgage even if you have low interest rates. Now, if you have a 2 % mortgage, ignore what I'm saying. That is a gift from God.

42:57Matt Bertulli:That's different. Yes, that's free money. Take the free money. But balance sheet-wise, I think I'm with you. I think it's still the same thing. It's like if you have a million bucks and you have a half a million dollar mortgage at 2%, you're basically mortgage-free. That's great.

43:14Sean Frank:But all we're saying is like, it's like, you know, our jobs are very risky. Our business is very risky. We have a lot of, we have people smarter than us that have gone bankrupt, right? Like you can get taken off the board and it's so much easier if you just own, own your house. Just like it's an asset that's just going to be there. Mike, you brought up having avatars, people you look up to. I'm sorry. I actually pause what I'm saying. Matt, what do you want to say something?

43:38Matt Bertulli:Yeah, I want, Sean, I want to hear your, like what you're aiming for. Like, what are your goals? Like you're a young guy. uh what what is like the north star for sean frank yeah and mike brought up having avatars

43:52Sean Frank:um at my avatar in my personal life is jeremy our good friend because you know uh we talk about we we've known people who've gotten rich and then stopped working right and like you know you you get after booze a little bit you get after the ladies a little bit and then just like you end up being 45 doing stuff that 22 year olds would do right uh jeremy's not that guy jeremy's insane like he is still probably working 14 hours a day yelling at suppliers he's texting me about like he called me during this to talk about some sort of new north beam feature he wants to talk about and that's a guy who by all accounts has made it and he's still grinding so like that's the avatar for me it's like it's like the reward is doing the job it is not the money or anything else it's like the reward is like you get to do the thing every day and that is just so inspiring so i'm trying to be like jeremy when i when i grow up dude the guy the guy's killing it he's a true love of the game

44:49Matt Bertulli:guy he is he's he absolutely is my favorite thing that jeremy does honestly and this is like maybe we'll turn this into a jeremy love fest him and his wife like go for a walk together i was just about to mention that from the titans episode i'm like that is like the coolest thing like that you you can do ever that mike goes back to the whole like money is not a tool to solve all things you know like you got to find the things that that you just like these these things light you up they fill the cup and they can be really mundane you know like i got a friend who love like genuinely loves to garden he loves it that is his jam man he's worth like 250 million dollars he should have a gardener but that guy is outside hands in dirt doing the thing he loves it i'm like good for you man like that's that's great he doesn't cook for shit uh somebody else does that

45:35Sean Frank:for him buddy gardens yeah on that jeremy love fasted we have to give cassandra her flowers because she puts up with a guy who is a maniac who is who is yelling all the time at their suppliers or whatever so i mean the other really inspiring thing about that is like it's a husband and wife team who've stayed together for 20 years building a huge business it's like easier said than done like those things are very difficult so that's that's the goal mike's also expressed wanting to work on bigger businesses. I love Ridge. I didn't found Ridge, right? Ridge has paid me all the money I've ever earned in my entire life.

46:07Sean Frank:But no, I went to build space companies. It's like, that's cool. So I hope to do that next time.

46:14Matt Bertulli:So Mike, are you also of this mind where it's like the work is the reward? It's sort of the artist's way. It's like you can't be an artist if you don't like the process. I would make a generalized observation that you spend your life. If the middle of the road is I have exactly the right amount of things in my life for the amount of time I have that we spend our lives either in one ditch or the other where I've got too much on my plate or I have not enough to do with my time. And my generalized observation is that most of the world does not have enough good uses of time to fill their days. This is why like, you know, people doom scroll TikTok because it's just like we've got more time.

46:56We've got a surplus of time compared to good ideas of how to use it. And like, I actually think one of the things that drives life enjoyment is when you're able to come as close to balanced out on that equation as you possibly can. That like the number of good uses you have for the hours in a day and like that they kind of match. And this is the thing that I think, one of the reasons why I love the game of business is that because of the fact that you can be involved in multiple businesses and there's all these different things you can do that you can, if you're smart about it, you can do all the things in your personal life that you deem to be important and worthy of your time and then you can also come in and you can say okay i'm going to balance it out where all my other hours are used in these really good ways uh and in productive ways with with business and so like but the i think the difference for me with most people is i think a lot of people start and they're like well okay here's all the hours that business takes up and how do i cram in all the other things that I think are important and what's left.

47:56Whereas I'm starting to kind of invert it where I'm like, okay, what are the most important things to me? And they're not business. And then like, I set aside time for all those things. And then I'm like, okay, now like kind of the analogy where you've got a jar and you put in the rocks and then you pour in the sand, like, and then I'm going to pour the sand in on top of those things. And the sand is, is my time in business. And so like, it makes it where I rarely have a meaningless hour. right and I love that but also the things that are most important don't get cannibalized for my business stuff because the business stuff just doesn't matter I mean like electrolyte packets don't matter compared to my kids right they're like not even in the same universe and you know it's funny that I say that and we laugh at it but it's like sadly like lots of people make that mistake right where they end up prioritizing their careers with their company over their kids I mean have you guys watched any of Ben Sasse's stuff so he's great.

48:50He did a, an hour was 60 minutes. It's been going around Twitter and going viral because it's so good, but he's got a stage four pancreatic cancer. He's about to die. He was a Senator and then he was president of university.

49:02Matt Bertulli:Oh shoot. My business part was just telling me about this guy. Crazy story. Unbelievable guy. But they were asking him, you know, cause he's basically at the end of his life. They were asking him like now, like, how does your perspective change on your life? What would you've done more of less of? And one of the things he did is he said, you know, I just would have traveled a lot less when I was early in my career. I was in private equity and I traveled tons. And he said, I kept a card for every hotel that I went to and I'd keep it in this box when I came home. And I was looking at the other day and there were just thousands of cards in there.

49:31And I'm just like, man, what a waste of time compared to the things that were really important to me. And I think if we're honest with ourselves, we all have things like that. Like how many times have I just refreshed a dashboard where I could have just, you know what logged off and gone and like hung out with my kids or had a conversation with my wife about her day or you know basically done anything other than just doom refresh on on Shopify and this is I think this is how I'm kind of changing as a person after all the years of being in it is that I'm just starting to reorder my life around what I want to be true about it from first principles and the business is giving me the flexibility to do that which is awesome To me, that's like the highest possible outcome from starting a business is that it allows you to do that.

50:40Sean Frank:hey, you guys need to do the same thing with returns. And now Rich Panel has a returns portal. It's built to cut down your tickets and convert more refunds into exchanges. They do the heavy lifting, data imports, self-service, retention flows, team training, all of it, and they'll be live in two weeks. If you want to save 30 % guaranteed on help desk and now returns, book a demo.

51:01Matt Bertulli:Look, I'll give you the first thing. I'm listening to Mike here talk about the hotel business cards. Mike, I call those badges of dishonor. So like mine was always air miles, like loyalty with airlines. Like if I was, if I ever found myself in the position where I was like in the absolute top, you know, rewards program of an airline, I really fucked up somewhere. You know, like that is just time on a plane, likely not with my wife and child or with anybody else that I really want to be around. So I try to avoid those. I don't know if you guys are like this, but I'm like a goals and anti-goals kind of guy.

51:41Matt Bertulli:I find it often easy to like start with anti-goals to say, like, these are the things I don't want. For me in business now, honestly, I get so much value out of working with like people I like that are, you know, have a shared set of values that are driven and smart. Like that is so fulfilling. I could kind of just do that forever. and to me that's the like sean that's the the work that matters um i could just show up and do that for for a very long time i think the money thing is just a tool it's like uh best framing i've ever had for that is it's just an amplifier like the more you get is it just can amplify who you already are um i'm with mike i like my life is not that complicated and it's not that fancy like i like to be outside and ride bikes and hang out with my friends and drink wine in my backyard.

52:33Matt Bertulli:Like I like to cook. These are not things that cost a lot. Uh, and I could just do them increasing in frequency and maybe intensity. And that's kind of about it, you know, like, but I'm also in my mid forties and it's, if I'm being honest, did not have a clear as picture, maybe as you do, Sean, at your age, right? Like when I was 30, 31, I was very money motivated, very like get more i don't think i i sort of had a lot more clarity around what i want and how i want to work and live until i was in my late 30s uh i don't know if that's slow or not i don't so i've got a super interesting question around what you just said matt um and maybe this is a way to kind of wrap this up like we obviously are coming from the perspective of kind of having semi-made it and obviously we're just in a different part of life we're all in the in our unc phase although Sean, you're an honorary unk.

53:28You're like a old soul. But I wonder how it's we would counsel our younger selves. Because obviously, a lot of people are listening to this. They're like, yeah, that's great. But here's the deal where I am. I'm trying to make payroll next month or whatever. And what would you say, Matt, maybe we start with you and then you, Sean, what would you say to yourself seven years ago, 10 years ago, based on your experience today? Like if you could give them some kind of insight or vision based on how you're situated today, back during a period where it was more of a struggle.

54:07Matt Bertulli:For me, what Sean said earlier is probably the most important thing I would have needed to hear or to understand. Hearing it and accepting it and understanding it are very different things, but you need a lot less than you think you do. Uh, cause once I, I like what I thought I needed. And I, once I far surpassed that, I was like, what a stupid goal. Like I hadn't, I just picked a number out of my ass. I didn't really understand where it came from. Uh, and it has absolutely no, like all every dollar above that has had zero utility to me. um i would try to i'd try to slap my young ass into understanding that

54:47Sean Frank:it's the way i would put that we know connor uh my my cmo who does a podcast on the network love him to death he is one of those frugal guys you'll ever meet in your entire life okay the guy does not spend money he he i had to beg him to rent a house to live in he moved back to la he's with him by himself he was like yeah let's get an apartment or something i'm like dude just spend ten thousand dollars a month get a nice house like what are you doing um all of his clothes are bought secondhand he buys everything off of depop like he he has never bought a new pair of pants in his entire life i guarantee it okay um but you know because of that i mean we make a lot of money he's he's a very wealthy guy and we just did a big payout and i'm like hey what are you gonna do with it he's like nothing i'm like so he was like are you gonna put it in the market he's like no i'm just gonna put my bank account i'm like and you're just gonna see the number get bigger he's like yeah i feel better number bigger that's good uh and if you're ever if you're ever in that position in your life it's like oh yeah like look he feels very secure he's doing great i love connor to death but it's like you know if there's not a practical use case for the dollars then you don't need more dollars right i think that's that's that's a pretty realistic thing if you weren't hungry you wouldn't get more food so that's i 100 agree with what you're saying I think you need less than you say.

56:06Sean Frank:If I was going to go back seven years and talk to younger Sean and tell him, hey, think about this, prioritize this, it would be take money out of the business. It's like you see what you get, right? So the more you prioritize it, the more you'll get of it. And I see a lot of guys who are like, no, actually I have to do this thing. I'm going to try this new software. I'm going to put this into this new experiment. I'm going to launch this new product. And it's like, all that stuff's great, but unless your needs are met, just you tell people, I'm taking 10 grand every month out of this business.

56:37Sean Frank:I'm taking 20 grand every month out of this business. Your business will find a way to support it. If that becomes a top line priority, if it's number one in your priority stack, your business will find ways to support it. So your business has more money for you than you think. Just like all of our net worth is tied up in our business, the business can give a lot back to you if you prioritize it. Yeah.

56:57Matt Bertulli:Pay yourself first. So Sean, I'm so happy you said that, man, because there's two schools of thought on this right one is like you are you're here to serve your business and to serve your people but then we and i think that if you follow that ball that ball down the path a little too far you forget that the business is also here to serve you like otherwise what are you doing uh there's actually books on this i think one might be called uh profit first or pay yourself first but i don't know there's like there are people that have written about this uh subject and there's actually frameworks that you can follow where like you can just set like this is the amount that gets drawn out of the accounts every month.

57:33Matt Bertulli:And that's like you budget up from distribution to yourself. Like that's very much a way to do it. I don't know if you do that forever, but it's, I'm with you. I love that, man. That's great. Mike, what about you? What would you, what would you tell your, you know, young Mike, not the going around the world mission, saving everybody, but like the, I'm starting a business, Mike. Every SaaS company says they are AI powered, but very few can explain what it actually does for the revenue of my brand. This is why PostScript's approach stood out to us. They don't just build AI for demos or buzzwords.

58:09Matt Bertulli:They built it to drive real incremental revenue. PostScript's AI called Shopper, it shows up inside of SMS at moments with real buyer intent when shoppers are likely asking questions, hesitating, maybe even about to drop off. Shopper can answer product questions instantly, answer questions about fit, availability, recommendations, order issues, the kinds of stuff that people usually bounce for. This means more conversions, higher A of you, less lost demand. So you are driving more revenue and doing it more efficiently. Check out Shopper from Postscript. We use it at PILA, which is why I am telling you to check it out.

58:43I think I would tell him that you have a lot of idealistic ideas about things and it's okay to be different, but there's also a reason why people do some things that they do. and that some of my idealism has probably done more harm than good. Some of it's been good, but some of it's not been great. I think Sean's point is a really good one. And I think it's a good one for more reasons than one even. One being that like scarcity, as I mentioned earlier, helps create focus and it helps bring out the best in people. I think that one of the most powerful things we did is very early in the business, we were like, we are going to give 10 % every single year.

59:20And so we just kind of budgeted from that, kind of like you were saying, Sean, what I should have done is I would have been like, we're going to give 10%, we're going to distribute 10%. And then we are going to make everything else work or something like that, where like, I was just building it in from the beginning. And that I think I was focused more on like, kind of maximizing growth. I probably I've learned along the way that like, the way that I feel about my personal balance sheet and the way that I run the company are more tied together than I would have expected. But I just think in general you know i'm an enneagram three i would have just set myself down and been like hey you're more insecure than you think you are and you don't have to prove anything to anybody and i think that as i've matured i've gotten better and better about that just being comfortable in my own skin and not feeling like i i mean really the person that i've tried to prove the most to has probably been myself but you know like we can drive ourselves crazy doing that and like it's good to be ambitious it's good to be driven but um i i probably at points especially around the start of the company had just kind of uh you know borderline insane levels of of drive and i would have probably been like hey you know you can chill there and and i think one other thing that like it's interesting we were talking about that um that example of the hotel cards I think in different seasons of your life the same thing can have different meaning so there are things that I've done over the course of my career because I needed to do it to protect the people that care I cared the most about and to put you know and to make things continue to work and their badges of honor but if I did them today they'd be badges of dishonor because I don't need to be doing those things today if that makes sense I think context matters a lot.

1:01:12So anyway, all that to say, I think I would say some similar things to what you guys said. And then I would probably add some specifics around how it's okay to look at how people have done things and to imitate that while still having this higher view of what business can be about. And then I think I would have said one other thing that has been true, but I would have really emphasized it to myself like you you do not want to leave a wake of bodies behind a successful business and a lot of times successful businesses leave a wake of broken relationships behind them and fortunately we haven't done that but i would have emphasized that even more that like be intentional here uh because in the heat of battle and and you get so fired up and so ambitious that like it can cause you to not talk to people or treat people the way that you want to and something we can all grow in, I think.

1:02:06Matt Bertulli:I was thinking more like practical and tactical with how you get money out of a company in this space. But I think that that's simple. And I think that the bigger questions are what we went down, which is why are you doing this and how do you want to do it and for how long? I think really practically setting small short-term goals that you can hit over and over again is way better than one massive dump of money is kind of like my overall takeaway. way. Like I remember really early on when I had virtually no money, like I set a goal of I'm not going to buy an HDTV until I accomplish X. And then I love that TV because it was like, it was kind of this trophy concept of like, I'm not going to buy it even though I really want it.

1:02:48I'm not going to do it until I accomplish this. And it's amazing how gratifying it is when you set goals like that. And then it's way more gratifying than like, I can do whatever I want right now?

1:02:58Sean Frank:I think there's so much pressure around the big pool of money, the big transaction, actually getting that distribution that you do leave more bodies in the wake. You make more sacrifices because you get so close to getting$20 million and then you don't get it or there's the risk of not getting it. And that's why you see people get really bad private equity deals, right? Because they're committed. They're so into getting it, they have to get it, right? Because they've deprived themselves for so long. Like that is the carrot they've been chasing. That exactly. If you're starving, if you're starving when somebody offers you, you know, a crap sandwich, maybe you eat it.

1:03:36And I think that like that idea of in moderation, that you're gradually growing your net worth, you're gradually enjoying the fruit of your labor, but not this like huge step change, not this idea that I'm going to be able to do this huge step change and do it well.

1:03:50Matt Bertulli:Sean, what you're hitting on is literally the reason why private equity funds know that they can retrade a deal at the last minute for sure and

1:03:57Sean Frank:like i would i would do like you know i i hate a lot of business practices but like mike says they do them for a reason it's like if i was in private equity i'd be retrading every deal that came across man because that's that's how you get the best returns yeah i mean it like we've talked about this before you know how you sell your business for the biggest amount by not wanting to sell your business because you can just sit there and be like i mean i've heard so many stories like this where it's like, well, they came to me with an offer and I said, no, and then they doubled it. And I said, no, and then they tripled it.

1:04:25And I said, no. And then eventually I sold it when they quadrupled it or, you know, whatever. But it's like, when you, when you have a strong kind of, when you have a strong life and a strong personal balance sheet, like you don't need anybody to come in and do anything in your life. And then that's also, even if you do want the outcome of selling a business, it's by far the best position of strength you can be in. here's here's a good note to edit on younger sean wouldn't know what to do with the money

1:04:52Sean Frank:older sean has now he'd do bad things with it right so it's like it's so true if current if current sean got a billion dollars i would it up right so it's like you have to grow into the game ahead of you and you can do that in you wouldn't do that in steps not step changes right so you know like if i i couldn't play in the nba right now and if you put me in the game it'd be embarrassing but it's like, if I can work my way up, I'll play in middle school, I'll play in high school, I'll play in college, I'll play in the G League, then I'll be ready to play in the NBA. And it's the linear progression that we have to go through as people.

1:05:26Sean Frank:So don't give me a billion dollars now, but in 30 years when I have it, I'll be an expert with what to do with money.

1:05:32Matt Bertulli:That's actually a great place to end it. Let's just stop there. That's great advice, Sean.

1:05:36Sean Frank:All right. And if you want to send me a billion dollars, okay, my bank account information. He's changed his mind. Next episode, when he sells Ridge for a billion dollars, No, boys, that was great.