543: How She Made $50M Buying Boring Businesses | Codie Sanchez [VIDEO]

28:16And so at some point, I am probably going to want to go back and I'm just going to want to have a floral shop and I'm going to be stoked, you know. And I think you can be really happy doing either. I want to see how far I can get, but everybody doesn't want that. Like my mom doesn't want that. She's really happy, you know, with a small teaching school. That's like, she's thrilled. And so So I think on the internet, sometimes people forget that. They're like, yeah, it'd be way easier to run a$5 million a year solopreneur company. And you're like, most people will never be able to run a$5 million a year solopreneur company, you know?

28:56Yeah, look, I agree. I agree. And that's what we've noticed as well. Like, so for us, we interviewed tons of super successful founders, you know, at this point, I've lost count, but I think I've interviewed close to over 100 billionaires, right? like some of the richest people in the world, right? And we find like those stories, while they are incredible and amazing, they're not that relatable because you're right. Most people just want to be able to have a business that allows them that financial freedom and time freedom. But then at the same token, right, it's never enough. Once you get there, like what got you there, that's what I found as well.

29:36What got you once you do have that? But there's just something for most people that got you there. You're just like, oh, let's get some more people. Let's see how far we can take it. Just like how you said, right? So it's, yeah, it's an interesting dichotomy. Yeah. You know what's interesting? For the big time founders, it's never enough. And that's something we got to battle against. But I mean, I was like just talking with a guy the other day that I think really highly of. His name is Spencer Scott. And he ran a bunch of like SaaS, light SaaS businesses, basically. He was a software engineer, spun up a couple of businesses.

30:10They did well, not crazy well, but like kind of okay. He sold one that did kind of okay. And then one day he was pissed and he was in his neighborhood and his trash cans had just been like mangled and thrown over in his neighborhood. And it happened like a lot. And so he puts up a post and a quick landing page and just says, if you guys are as mad at this trash company as I am. I will spin up my own trash company if, I don't know, 200 of you sign up here for this service for X a month and do this recurring service. And it was a Facebook post in their community group. He posts this, wakes up the next morning, is like, holy shit, he's got$15 ,000 in pre-orders.

30:51And so Spencer, who really like originally made all his money on the internet from software, is a garbage man once a week, every Wednesday. and every Wednesday he drives around in a garbage truck and he picks up garbage and then he goes and tosses it to the dump and then he comes back. And so I did it with him for a day. It was oddly kind of fun. And if you, like I was like, Spencer, you're the happiest motherfucker I've ever met. Like what is going, I mean, he is, he's honking at neighbors. He's saying hello. They're saying hello back to him. He's like, do you know how miserable I was sitting in front of my computer coding shit, Having like, you know, customer requests via email that I never met.

31:33I never knew them. There weren't that many people saying nice things to me. I was like vitamin D deficient. I didn't realize I was lonely. He's like, no, I'm pretty happy. And he can have both. And so I don't want to be dramatic and say that, you know, garbage men are happier than people who own software companies. That would be a crazy line. But I do think that there is something to like getting out and touching your neighbors and touching the humans around you. And I think our generation is starting to wake up to the fact that we were sold a bag of goods when it came to being happy. And it's not inside of a cubicle doing what we're doing right now all day.

32:13Like Zoom meetings all day is a recipe for misery. Yeah, I agree. I agree. and I think what we both can agree on is life is too short to not do work that you don't enjoy all right that's what life is all about yeah well and isn't it wild that most people do I mean you've seen the statistics it's like 60 to 85 percent of people actually do not like what they do for a living in the U.S. at least and yeah and I think that comes from fear and this this truth the reality being that starting something's really hard and not everybody can do it and so I think that truth leads a lot of people to stay in jobs that they hate.

32:53And that's why we like those accounts that are like corporate Natalie or whatever. And they're making fun of like all the dumb shit that you do at work that makes no sense when you're in a corporate job. And like, we are living in perpetual office space, a movie that we all remember, you know, from the 90s. And I don't think we were supposed to do that. So my hope is that this idea of Main Street millionaire is a way to push back. But it's not to say that it's easy. It is not easy. It's not easy buying a business. It's not easy running a business. But you can also start by owning part of a business.

33:30You can start by being the operator of a business. You can start by getting skin in the game and the company that you're at. But I want people to progress into ownership as opposed to all of us getting out of ownership. Yeah, I agree. And you talk about fear, right? That holds a lot of people back and you also shared that um you're a bit of a wuss and it took you a while to go all in can you share maybe a personal story or like what what kept you like going all in um what kept me well i mean the the i kind of was joking with my team two minutes before this They were like, why'd you write the book?

34:14I was like, for all my haters. And I think that is, I think that's part of it. You know, I had bosses I hated who had lives I didn't want, who I thought I knew more than, not always true by the way, but you know, I think most of us founders are totally unemployable at some degree. And we realized that later on in life, but when we're young, we're just, we bitch and moan a lot. And so that was me. But you know, eventually I got to what I call my fuck you-ometer basically went too high. It was like, I couldn't handle it. I was bursting. And so there was some point where I was like, the way we're doing business doesn't make sense.

34:54I actually really liked my job. I liked what I did every day. I liked my team. I ran a team in finance. But I hated how the bosses wanted to run the business. And I was like, if you guys saw what we could do on the internet, you would change how we did investing and you would change how we did distribution. And then, you know, they told me no. And they were like, listen, you're on my boat. If you want to go left and I want to go right, you have to roll my direction. You got to get a boat. And I was like very mad about that. And then now I realized that's totally reasonable. And that was the right move by them.

35:28And so, but it was basically that. Like I couldn't take anymore. I was like, this is not how we should run the business. And so it was at that point, I had already had a few deals go through. I was already making money on the side that I realized like I could do this by myself. And so I finally, finally did. But it took way longer. Like most people who are big time founders, they didn't work in corporate America for 10 plus years. Like that's not that normal. But I guess my point there is you can still be a successful founder, even if you have only been in corporate for a long time. Yeah, I agree 110%.

36:03So So I'm curious, when did you start really building this movement, building this community? Because as I shared offline, it's been really impressive watching your journey from afar. We connected well before you blew up. And then I just started seeing you everywhere, especially just kind of after COVID, you start the Contrary Newsletter, Contrary Thinking Newsletter. and I've just been like, you know, watching from afar, super impressed by this community and platform that you've built and built your personal brand. Like you've done such an exceptional job. Talk us through like how all that came about and why you decided to kind of start creating content around this building a media company versus just kind of having a holding company building in silence building in private?

36:59Yeah, well, you know, Naval now talks about the three layers of leverage. I think I realized in 2020, when I wasn't traveling so much, I wasn't doing roadshows, which is what you do to go raise capital for funds and private equity. So I had some time to think. And I realized, you know, that at the time, I think he was right, there were three types of leverage. There's capital, which is, you know, money, the banking regulations happened, Rothschild's, became very, very wealthy. That was like a big lever. There's labor, right, which historically was slavery and then became employees. And then there was code.

37:37So Bill Gates and Elon Musk and Jeff Bezos, and they all had like an army of labor in the form of code that did things for them. And I started seeing in 2020 this idea that audience could be an even more powerful form of leverage. And in finance, we understand leverage pretty well, because that's how you make more money is you see a deal, you think it makes sense, and then you add more money to it in order for the returns to get even higher than they could if you didn't have leverage. And so I saw this leverage happening in an audience. And I tried to at the time get my firm that I was a partner at to do more to gain an audience.

38:19Like I wanted us to have a big email list. I wanted us to build a little bit of a media company. And they were like, you're out of your fucking mind. No way. That's so the word in finance would be retail. They called me retail, like, which means, you know, that's, that's like what low level finance people do, not the fancy finance people. And so we would never do that, because that would not be sophisticated. And, and that would be beneath us. And then serious people wouldn't take us serious. And so I kind of fell for that for a while and listened to it. And then finally, I was like, You're wrong.

38:53You're literally wrong. And I don't think you see where the puck is going. And so I started creating content myself. And I was like, fuck it, I'm going to do it. And so I started doing it. And then I remember at some point, this is a similar unemployable Cody thing. My boss was like, well, he wasn't my boss because I guess I was a partner. But the senior partner, the one who had founded the firm was like, we don't feel comfortable with you creating this content. You know, this doesn't look good for the firm overall. You're going to need to stop doing it. And I was like, one, you can't tell me what to do.

39:28And two, no, this is actually huge for us. And we're raising millions of dollars. What are you talking about? And at that point, you know, he said, well, you really need to make a decision between the two. And I said, well, it's no decision. I'm going to go do my own thing. So you guys need to pay me out for my percentage of the firm. I don't want to have anything to do with it anymore. And so we went to settlement, came to some sort of terms, and I left. And one of my partners got it. He had been actually early at Moviefone before they sold the AOL and Sportsline before they sold the CBS. So he had seen this in other industries.

40:04So I remember he reached out to me and he was like, listen, I see it. I see what you're doing. I want to stay in touch. And I think this is going to be big. and I'll always respect him for that. And so I went out and started creating more content and I think I proved that theory right. But at the time it was really scary because I've always been the type of person to want other people's approval and they're like, I wanted all the credentials, which is why I went to grad school at Georgetown and then got a PhD in Brazil. And then I worked at Goldman and then I got this title and then I spoke this language.

40:38And I was always wanting to like prove myself and I never thought I was enough, which sounds goofy, except just that's how I was raised. I don't know. And so it's really hard to leave and go retail and talk to the people instead. But I think it was the right move. And hell, I mean, you've seen, I see the exact same thing happen right now in politics. Like I was at this think tank event in the US, Nathan, right before the election and a bunch of people were saying, and like, forget the politics of what side you're on, but they were basically like, ah, these podcasters are dumb. You know, they don't make any sense.

41:22You know, we don't like them. And this was like from the guys on the same team as those guys. So it was like conservatives to conservatives. And they were like, these low level podcasters, yuck. And I remember sitting there thinking, I mean, this is like some of the leaders of the free world are at this event. Like some of the richest people, biggest minds, and they all were like, these podcasters are dumb. These people are dumb. And don't worry, we're going to just kind of get rid of them. And I remember thinking, oh my God, they don't see it. They don't see it at all. They think this is retail and they don't realize that there's like a movement happening in the world today.

42:01And that is that we do not trust institutions anymore because institutions have not been very trustworthy. And so the people are saying, you need to listen to me. I don't care if you have a degree. I don't care if you have a title. Like, I am just as much a human as you are. And so I think the movement and how I was able to grow online as much as possible is because I saw that. I was like, I agree. Yeah, I went to Georgetown. I worked at Goldman. But that doesn't fucking matter. What matters is like, who are you? And like, do you see each other as humans. And so I think it's only going to become more important that you talk to people direct because people just do not trust companies and institutions like they used to.

42:48Yeah, look, I agree. More than ever now, people are interested about the person behind the brand and the why. And more than ever now, you see founder-led brands building in public, all of these things and taking people on a journey, it is so powerful and you're doing an exceptional job. But here's the thing, right, Cody? There are so many people that I've seen, I've been in this space for a long time, right? And I've kind of always just kind of, you know, most of the people online, you know, I'm still in Australia, but I've met most or connected or friends with a lot right most um and i've got stories for days but there's a lot that come and go and i'm it's not that easy right like and you've been able to get incredible cut through you talk about attention like where did you start what did you start with how did you work this whole thing out because it is not easy to create the brand that you've built and this community that you've built in the past, like literally three to four years?

44:00Yeah. Well, if I could give one piece of advice on what I think we did well, it's we try to not be takers, but be givers. So like if you come on to any of my platforms, you don't see me doing a lot of advertisements for one-off random shit all the time. In fact, you'll probably never see me do that. You'll see me advertise very particular things for companies I really like, normally have invested in and own part of, I'm real transparent about. And usually like with some sort of giveaway or something associated. So I tried to not take a lot from the audience, which I think is the opposite of what a lot of influencers do because they make money off of their audience's attention.

44:42What we do is we, I make most of my money off of my small businesses that I own. And then we have an academy that we help people buy businesses and now scale businesses and eventually exit businesses. But it's expensive. And what that does is that means that I am actually only selling a very small percentage of my audience every single month. Like, I don't need tens of thousands or hundreds of thousands of people to buy from me. It's a very few people that the price is so reasonable for them, it'd be ridiculous for them to not do it. Because even if what we sell is a five-figure investment in order to learn how to buy a business, your ROI on buying a business is six figures, millions dependent.

45:28But for most people, it's like give everything possible for free. You really don't find like a lot or any low ticket anything from us. And so I think that was really powerful in the beginning. I never said that, you know, I never said that I didn't have anything to sell because I don't think there's anything wrong with selling. I think it's if I have a product that is an amazing for a human, I want to give it to them. That's that's incredible. Love that transaction. Same thing for me. Instagram knows the stuff I want to buy better than my husband half the time. Zucks got me down. But I was really thoughtful on like give, give, give.

46:00So I think for the first year we were in business, I took not a single dollar from the audience. We didn't charge for anything. The second year in business, we started charging for a few things. And the third year in business, I started taking a salary from the business. But before that, I didn't take anything out of the business. And so I think the give versus take thing is super, super important. And then the other thing I think I got lucky in, but it wasn't my plan, is just I really obsessed on like what was my niche. I didn't try to be everything to everybody, you know, especially when I started.

46:38It was like, I talk about boring businesses and how to buy them and how to grow them. And that's it. And if you want to see some wild videos on that, awesome. We'll be buds. But I didn't try to go wide. And I think a lot of creators, they try to be relationship advice, home advice, personal advice, business advice. And I was just like, here's the one thing I think I might be the best in the world at, which is how to buy businesses paired with how to make it really simple paired with content. And so that's all I'm going to talk about. So those would be my two pieces of advice, maybe for people who are just starting out who want to grow really fast.

47:15Yeah. Look, I also see your content is, it does, it does start to go wider because you talk about, you know, making money, financial freedom, but yeah, the buy, yeah, it's core around you help people really buy boring businesses. You can go wide after you've captured your main audience attention. Then you can be the rock and you can talk one moment about WWE and you can talk the other moment about tequila and you can talk the other moment about being daddy, right? But people have to care about you before they're willing to hear all these things from you. In the beginning, it's either just massively entertain me or massively educate me.

47:52And so that's what we tried to do was really think about, like, how are we serving these people? And hopefully as much as possible, like, I want to make it about them, not me. And that, I think, I don't think a lot of people do that. Like, they want to go on a stage and have the crowd chant their name. Like, that's intoxicating. You know, they want all the photo shoots, you know, about them with the brands and whatever. I don't so much care about that. I really, at the end of the day, it's not that I'm egoless. I love building huge businesses and having huge bank accounts. I fucking love it. It's my favorite thing.

48:32I love making money. but I don't care about getting all the credit at all. And I think that helps online because a lot of those people do care about the credit. They're like, yeah, I told him how to do this. I'm like, no, no, no, you did it. Like I gave you the idea, but I can't make you better. Like only you can. That was all you, man. Yeah, and you're very authentic. I think that is one of your strengths. like yeah um it's yeah it's very it's very trustworthy you can see that you're a good human being and somebody that yeah you want to follow um so just to round out the whole buying businesses piece you you talked about kind of it is costly like you know your first business costs you know, a hundred grand.

49:22And you do also have this idea of, you know, seller finance. And can you talk us through that? Yeah. You want to know something crazy? So, 60 % of all businesses are sold with seller financing, which is essentially the seller of the business will help you pay for the business using their future profits. If you would have told me that even when I was in finance and had done like, I don't know, probably dozens of deals by then, if not 50 plus. I don't think I would have known that. We were so indoctrinated to think we raise capital from investors, we get loans by banks, that's how deals are done.

50:05And yet that's not really the case in small business. The second thing that's wild is that the government doesn't really want you to talk about seller financing. And again, I think it goes back to intermediaries and some scammy people. Like, listen, there are scammy people on the internet that will be like, you too can buy a business with no work, zero dollars down in 20 minutes in your backyard and sell it for millions, right? And so there are protections in place to make sure that there aren't scammy people trying to sell you a pipe dream. And because of that, seller financing or creative financing, they get a bad rap.

50:45And also because maybe sometimes when people do them, they try to take advantage of the seller. So they'll be like, I've never run a business before. I don't know anything about your business. I don't know you, but I want to buy it for$0 down. And you seller finance the whole thing to me. You're like, kid, what? And so I think for all those reasons, this thing got a bad rap, which are like reasonable reasons. But the truth of the matter is, There's really no difference between seller financing and bank financing, except one is normalized, expensive, and has an intermediary in between. One is not normalized, harder to get, and does not have an intermediary in between.

51:27So getting bank financing is faster, typically, and more expensive. Getting seller financing is slower and potentially cheaper up front. Maybe could be cheaper overall. The thing that's cool about today is that we have a supply and demand imbalance. So we have millions and millions and millions of small businesses for sale all around this country. We have hundreds of millions of businesses around the world that people don't realize they can even sell. They think about it as jobs. They're just going to close them down. We have a baby boomer generation that doesn't have retirement plans, that doesn't have enough money because most of their net worth is tied up in their small business.

52:11And they're looking for an out eventually, but they're just going to work in the business forever because they really don't have any other option. And so the idea that I have is let's pair together the two generations, the baby boomers or the elderly generation and the generation Z, X and millennials. And let's let those two generations, instead of being mad at each other all the time, become each other's solution. And I think we can do that through seller financing because the baby boomers want an exit and the millennials and Gen Z and Gen X want some ownership and they want wage increases. And so that is where seller financing comes in and I think is a really powerful tool for businesses that otherwise are unsellable.

52:58Yeah. And look, I've never done it before. I think it's really interesting. But I was going to say I saw – Have you ever bought a business? no never bought have you ever aqua hired anybody nope never never bought no ip either no no no no that's just total organic growth yep yeah never bought a business was looking to buy a few at one point but no never bought a business sold but never bought oh that's cool so you built a business and sold it. So you've seen the back end. I mean, I think that, you know, well, here's where the deal junkie in me comes in. But like, your business is perfect for acquisitions.

53:44I think some of the best people for acquisitions are people who already own businesses, because you already know how to run them. And you can handle velocity and scale, right? Like, you know how to handle speed. And so especially a media business, you have all of these assets that people don't know how to price that just get shut down all the time in media because they don't have like a physical store or inventory or things that you can buy in the traditional sense. So we've bought, I mean, I've bought newsletters, I've bought podcast production companies, I've bought video production companies.

54:23I've bought, I've acqui-hired teams in the media space before. I bought part of an education company, online education company. So there's like so many things. And most of these deals were done with seller financing or a percentage of future profits. And I think once you do a couple of these, you get addicted. And then you don't look at, you don't look at making money the same. You kind of start going, huh, if I want to start a podcast business, like I did, I'm like, who can I buy that's going to accelerate this like way faster than if I just did it myself? And so I did. And then you, it's just like hiring an employee.

55:08You're selling them on a dream that their dream is going to get bigger underneath your dream. Like your dream's going to lift theirs up and make it higher than they could have ever gone by themselves. So you'll have to tell me if there's any deals you want to look at, but I think it's just such an accelerant on a business. Yeah. So I saw like what you're doing. It's really clever. Like you've now got a marketplace. Did you buy that marketplace or you're building that from scratch? Yeah. This hat right up here is BizScout and I bought it. I bought yeah I bought it to start and I bought it the way I like to buy it which is I didn't buy some big huge crazy software company I bought the kind of reasonably priced not very expensive software company to just MVP what I was doing I was like does this even work and then we put a bunch of money into it and now we're scaling it and then I bought that company which is a window cleaning company and that company, which is a paint company.

56:05So yeah, the, and, and I bought them in a way where those two companies are franchises because I kind of like the idea of other people being able to own like part of a national brand. Otherwise I'm no better than BlackRock or Blackstone. Like I want to create like a mountain of owners. Even though franchises are a lot of work, it's a heart. There you go. See, it's a tough business. I'd tell you to not go into it. But yeah, I try to practice what I preach, which is buy wherever we can. Sometimes I get a crazy idea and I start outright. Like I didn't buy a book business, for instance. I started the book.

56:45No, look, it's really clever, super impressive what you've built. And it's really interesting to hear this alternative of starting a business, right? It's an alternative. You don't have to start you can you can own and you can buy and you can sell a finance so look Cody we have to work towards wrapping up I could talk to you all day I know we're at time but and I know you've gone crazy on this book tour and a couple last questions where's the best place people can find about find out about more about your work and Main Street Millionaire and then what's what's happening for the future that you're super excited about love it well msmbook.com or Cody Sanchez dot com.

57:27Both of them lead to the book. We're actually doing this thing, which I haven't talked about yet, which is we're throwing a giant book celebration event. So not a launch. It's only for people who've bought the book. But we just hit, I think they just hit 22 ,000 pre-orders. And I was trying to kind of like share live because like launching a book's a real pain in the ass. If anybody's doing it, also a terrible business. But anyway, so we just hit that. So I was like, you know what? I want the people to be able to celebrate that we got there instead of just like the authors like, sick, I sold a bunch of books.

58:00So I'm doing this free event for anybody who bought the book and it's going to be amazing. We're going to give away something worth hundreds of dollars to every single person who comes virtually, not info products, not videos, not nonsense like that, like a real thing. And we're going to have a special guest who's a leader of the free world. And so if they go to msmbook.com, you can get the book. And when you get the book, you get a bunch of pre-order cool stuff, calculators, tools, templates, but you also get to come to this event, which I think hopefully will feel like a big gift to people. It'll feel like I'm glad I was there that day.

58:38Awesome. Well, I look forward to diving in, grabbing a copy and congratulations on all your success thus far. Thanks again for coming on. You're the man. Thanks for having me. This was fun, especially all these years later. All right. So if you love this episode, make sure to check out my interview with Alex Homozi on how he scales companies from zero straight to$2 million a month in less than a year. You were like, how have you achieved? You achieved like there's five years of my life that disappeared. In fact, I lost all the money, which I talked about in the book. I had all the gyms. I did the turnarounds and then I had zero dollars five years later because of mistakes that I made.

59:15but the things that I was gaining was not the money it was the skills it was the character traits and the beliefs