559: How a $100M Exit Left This 30 Year Old Lost | Jake Kassan

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0:39Just head to omnisend.com forward slash founder without the E to get started. All right, now let's jump back into the show. Our first year, we did a million. Second year, we did seven, 30, 75, and then sold it after like six and a half years for 100 million. And you'd never been more miserable. Yeah. Jake Kassan, co-founder of Movement. The brand that redefined modern watches. And built a multi-million dollar empire. Renowned for the direct-to-consumer approach. Your mastery of influencer marketing. Movement was sold for an insane$100 million in 2018. You wake up and your bank account, it looks like a phone number.

1:19There's gratitude, you're grateful for what you did, your phone starts blowing up. But all the mental power that was going into this thing I was building now churned. I just overanalyzed everything, every person, my whole life, and yeah, it just put me into a pretty dark hole. If you have unique skills and you know how to grow brands, why wouldn't you go again?

1:42Hear the stories, learn the proven methods, and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan. so you recently just posted incredible youtube video where you made a hundred million dollars from selling your business and you'd never been more miserable can you tell us about that yeah so i started the company when i was 21 movement i sold it when i was 28 and i think i just didn't really think about what I would do, what I wanted to do, why I wanted kind of money to begin with. And when I sold it, I, I, there was a moment in time where I had all these still meetings, which was people on my calendar.

2:38And I realized, I don't need to take these meetings anymore. Like, why am I taking these meetings? I just thought about my identity as a whole. And I just, I honestly didn't know who I was why if I you know hung out with certain people because it was good for business if I was taking certain meetings because it was good for business if I liked the things I did like reading material you know I was reading entrepreneur books and growth books and e-commerce but now I didn't have an e-commerce company I didn't have a company at all and and this was like right around right after COVID I think the loss of identity mixed with just me kind of being isolated, you just start to question everything and you don't know who you are.

3:22And just every decision you overthink. And I think all the mental power that was going into this thing I was building now churned and just started overanalyzing every decision I made. And sometimes you just have to live things through to find more answers. And I think I just got stuck in this place where I just overanalyzed everything, every person my whole life. And yeah, it just put me into a pretty dark hole. Look, first of all, thank you for sharing. And first of all, opening up, because I was saying to you before we started rolling, not enough people talk about this, that when you sell your company, it is a massive loss of identity.

4:01And I have an M &A friend where he said to me like, Nathan, like 50 % of the time, like people are miserable after they sell their company. and you know we see through Instagram all these highlight reels and it's so easy to compare yourself to other people that most people looking from the outside would look at your journey and be like wow you sold it you started this really cool watch brand you've seen it grow and you had a hundred million dollar exit people be like what what why wouldn't you be happy like you never have to work a day again in your life so so talk me through like how did movement start as an idea because I was basically a dropout in college and I had a roommate who was also very entrepreneurial.

4:46I had other businesses growing up that would get to a hundred thousand in sales and then kind of fail eventually. But so I was always entrepreneurial, always wanted to start something. I knew college and uni wasn't for me. So when I met my college roommate, we were both just like brainstorming different ideas. And at the time we were just thinking about things that resonated to us. And we were constantly scanning crowdfunding websites like Kickstarter and Indiegogo. And finally realized that there was this gap in like kind of the fashion world where none of these brands we really resonated with deeply.

5:21At the time, Nike was like, still is, but Nike was a brand that we really loved. And just because it evoked this emotional feeling within us. And so that was the kind of movement. There was no watch that we could afford that had this kind of emotional feel to be inspired. And the combination of like, let's build a brand with design and price that we really loved. That was for us, young men and women. And like that was that was the idea. And because of our e-commerce experience prior, it just took off. The Indiegogo crowdfunding page did 300 ,000. Our first year, we did a million. Second year, we did seven, 30.

6:02I think at our peak, we did like 75. And then I think we sold it after like six and a half years or something like that for a hundred million. But yeah, that was kind of the concept. And did you raise money? No. I mean, fortunately, a couple small like competitions that we won, we would get$50 ,000 or I think his grandma loaned us 50 grand. But the crowdfunding was, you know,$300 ,000 from$5 ,000 of credit card, you know, debt. We basically got the samples, got pictures, edited the video, marketed it, wrote everything, and then just sent it out. And we were just scrappy. It was just like early days before Instagram was really big or YouTube was still kind of figuring itself out.

6:46And really Reddit is where we kind of like went and like sent it. And then the crowdfunding platform just kind of took over. Did you ever think you wanted to sell the business? Did you start with that intention? I think I always knew that I wanted to. I heard Tony Robbins say something about financial freedom. It's the first time I heard that word or that, that term. And I always knew that, okay, like I want to, I want to find financial freedom. I didn't know how much money that meant, but in my mind it was, yeah, millions of dollars. And, and as the business was growing and we were doing, you know, 40, 50, 60, a hundred was kind of always that, that view.

7:22Cause we can kind of see it at the finish line. we actually went out to go raise money because we needed we wanted to continue to scale the business and we just needed outside capital to do that and then kind of at the same time we started talking to Mavado and who acquired us and it just was kind of like right place right time. And how long did that deal take? I can't remember exactly I think we were talking to them for maybe like i think three months four months yep um maybe it was like four months yep could have even been longer but there's like this you know just it starts as like conversations and then you go into exclusivity and you kind of start running from there but i think the entire from from day one of having a conversation with them it was like a four month period yeah got you for due diligence always the deal yeah i believe so yeah okay all right so take me back to the moment that the deal went through?

8:17I didn't tell my parents until, so I've been talking to them for four weeks, four months, sorry, talking to them for four months. Didn't tell my parents until the week before, because in my head, it's not done until it's done. So I just didn't want to jinx it. I don't want anyone else to feel the excitement or what pressure, whatever it was. I didn't want to feel more pressure, excitement. I didn't want to get let down. So eventually it goes through. and the next day you know you wake up and you kind of look at your phone and your bank account it looks like a phone number and you know you have this like yeah it's hard to explain you have this moment where you you're like there's gratitude you're you're grateful for what you did you're proud all these things your phone starts blowing up but but you still have you don't you just stay in bed and just like look at your phone all day you get up and it's like well what am I going to do today and you know at the time I'm still working at movement so I went to the office like I did my routine was exactly the same right so you go to the office gym whatever and then the next day the next day I think the best part was just hearing from people you know who I knew throughout throughout the the journey or whatever it was just like that was like this and maybe it's external validation but it just felt good the people who had seen the work put in who I had crossed paths with across the world, just be able to like share a small moment with them, I guess was like nice.

9:48And then, you know, you fast forward a few months later and yeah, I started to, you know, I bought, um, I bought a condo, like a nice condo. I didn't need a house because, you know, I'm single by myself. So I bought a condo and, and then you spend money on the areas you want, but like, you're not, I don't know, your life doesn't change drastically. right I was still working so it was amazing but I was still living the same life in many ways and so was it a did you have an earn out or it was an all cash deal and like like how did the transition take place yeah basically it was all cash deal there were some incentives but um yeah basically you know I wanted to stick around because like we just sold in the business and I wanted to do right by them they just changed my life um and also there was like still kind of you know a mission that I wanted to see through um and there was incentives so I kind of like kicked the can down the road or I like moved the goalposts I was like all right well like I can't celebrate until we win this so almost instantly I kind of tried to convince myself that like there's more there's more money on the table there's more to do here um but then COVID hit and I just realized that we weren't going to get those incentives and I didn't even care about those incentives because like I had money in the bank I wasn't you know I didn't I didn't need more I didn't know what more money was going to give me at this point and that's where like my whole I started to become a little unhappy and I started to realize like more money wasn't going to solve that and I didn't know what would solve that and that's where yeah things kind of started to come in.

11:22So talk me through that like so what happened next so you eventually finished up at movement did you start in like I know you invest in brands now but yeah like did you start like did you look at starting another econ brand or what happened yes i was i turned 30 when i left and you know at 30 years old a lot of your friends or all your friends are working doing this doing that the people that might be able to relate to you in terms of financial you know freedom or wealth are usually in their 60s maybe some athletes but a lot of these people are just like they're still involved like they love to work still or they don't know what else to do.

12:00So they're still working on something. I kind of realized that I didn't want to work on an e-commerce brand anymore. Um, I thought about other brands. There's just nothing that like, I, I love the creative part of movement and I loved, I think just accomplishing and being good at something. But now that I had like kind of done it to the degree of that movement did it, I didn't want to just do it over again for the sake of trying to do it bigger. And yeah, so I just struggled with what it was that I wanted to do next, why I wanted to do something. I had a lot, I started investing in brands thinking, well, maybe I'll learn a little bit about this, or maybe I'll be, you know, I'll be able to mentor and help other people, which I realized, you know, some people I'd give money to, and I'd be involved in the more like the conversation around the highs and the lows rather than tactical, because I'd make introductions, but I don't want to come in and be tactical.

12:54I don't, I'm not an operator. Like that's not what I love to do. Um, sometimes I'd give more money. Sometimes I'd get less. Didn't really change that feeling in my gut about like, like I was kind of chasing this feed, this high of what it felt like running my business and just accomplishing things and building something and getting good at something. And I just couldn't find that anywhere else. Um, and yeah, I kind of just started to casually invest and um I kind of just started like trying to enjoy life as much as I could I ended up moving to San Diego um you know I bought all the things that I wanted I thought I would want to buy you know and and I traveled and I played video games and smoked weed like I was just doing stuff that I was like I I earned this you know like like I can I can like I'm not just the bum i'm like i worked hard and i can do this and it would mask some of that that feeling i think for certain times but there's always be a moment where uh i'd just be inside of my you know my tower i'd call it because i'd be high in my my my condo i'd be high up in the condo and i just just feel lonely feel like there's more to life than just that like like my peak story doesn't shouldn't end here and in the thought of it ending here just are you hesitating to take the next step in your e-commerce journey?

14:16Founder Plus has you covered. With proven frameworks tailored to your business needs for fast results, a supportive community of over 30 ,000 like-minded entrepreneurs and weekly live mentorship sessions, Founder Plus is your key to success. Try Founder Plus today for just$1 for seven days and start building your dream business with confidence. You can visit founder.com forward slash start dollar trial or click the link in the description to claim your trial. It's felt depressing. You know, Tim Ferriss, I never forget he talked about like it's so hard to build a company and you sell it and then when you're in a situation you invest in companies, that excitement, you can kind of get that for investing in companies but you don't have to do the work.

15:00Did you feel that or not really? Not really, honestly. Not really. And I think it's just different frames of minds. Like I think understanding what drives you, what about, like, I really had to think about what was it, what was my happiest days at movement and like, what made me the happiest. And when I thought about that, I think there was kind of two parts. It was like working with people. So, you know, I think having this community around me that I was kind of like, like all these people starting their careers at movement and like movement succeeded. So like, they're all, you know, have accelerated their careers in many ways because of movement And also, you know, pretty much everyone made some amount of money with the exit as well.

15:44So just having that felt amazing. It's like these lifelong relationships. And I think life's all about relationships. I think getting better at something, like just being an expert at something feels good. Just having this knowledge and learning. But I think the biggest thing, like the early days of movement, thinking of this idea that and the vision for where it could go. and then being on my computer, you know, early days, even before like me and my business partner, like he lived in, uh, San Diego. I lived in Los Angeles at the time. And I would just be on my computer at my house, just like, you know, just, just brainstorming, trying to be creative and think about how we're going to grow, how we're going to do this.

16:24Like what's the messaging marketing channels. And I think the creative part for me, like the creation of something was really what I found. But again, some people love operations. Some people love investing. They're good with money. They're good with investing. Like I think for me, I just, I really realized that like it was a creation of something that I enjoyed the most. Yeah. I'm the same. Like when it comes to operations and all that kind of stuff, it's not my strength. I can do it, but it doesn't bring me energy. Yeah, exactly. And when you have money is a good motivation, a good money is a good motivating factor, but when you have it, you have to find what motivates you to be like that operator or to be, to do things that you don't want to do.

17:06And that was, that's, that's been one of the hardest things for me is like, you know, everyone is, some people are motivated by money simply because of ego. And like, that just wasn't me. Like there wasn't more, more money didn't, there's nothing that I wanted. And again, I knew that money wasn't going to make me happier. I'm, I still like the game of money. I still like, you know, thinking about certain things in my life and gamifying them, but I'm not going to sacrifice certain things in my life, my health or relationships just for money anymore. And that's where I realized I have to find something that that motivates me just intrinsically that I would love to get better at.

17:47I'd love to do. If money wasn't involved, I want to do it. Still incorporate money, but just need to find something at a base that I can really love. For you, when you started movement at the start, did it like, or even throughout that journey, it was obviously there's hard times, businesses are tough, but the calling for you was the creation and the building. Yeah. I think the creation, I think the calling at the time was, was money. Like, I think I, I just, I think for whatever reason at an early age, I was just motivated by, um, by, yeah, trying to make money and not that I had like grand tastes.

18:27I just like wanted to, I wanted the financial freedom. I wanted to help out my family. I wanted to take care of the people around me. I wanted to be able to do what I wanted when I wanted in some ways. And I've heard other entrepreneurs say this, but like, I can be very, very lazy. And I think money was like an opportunity to kind of, I can do things on my time, right? I can pick and choose and say yes to things and say no to things and not let money run my life. And I think there's good and bad in that as I've come to realize. But I think money was a big motivating factor. What I found that I enjoyed though, and the reason I always, there's lots of ways to make money.

19:05The reason I liked creating these businesses was the creation process. The idea of like all my businesses that I've had, I've sold like t-shirts, I've sold obviously watches, sunglasses, I've sold a bunch of other products and i've also i've always seen them on other people walking around in like random places and that's always been a really great feeling to be like i created this from nothing and then i've kind of seen it you know transform into the real world most would kind of go you have a unique skill set you know how to grow brands why wouldn't you go again i just couldn't think of a product that meant enough to me to like build it.

19:45And for this, and you know, I think I, again, I enjoy the beginning first couple of years, but I don't know. I just, I don't enjoy the operations. I'm not, I'm a, I'm a people pleaser. I'm not good with confrontation. I'm an introvert. So dealing with like dealing with the shit of, of managing people and headaches and, and, and just, you know, um, I was like a nice boss. I was like a very friendly, I think, I think everyone liked me. I was friendly, which isn't necessarily a strength. Uh, it can be good, but also I think you need to be, yeah, you need to be tough. You have to have tough conversations and I'm not good at tough conversations.

20:24Um, I've gotten better, but it's just not, it's just not something I enjoy. I did it and I'm proud that I did certain things. And, but yeah, so there just wasn't any idea, you know, like there just wasn't any idea. I thought about, I like clothing. I thought about different clothing brands, but you know, I'm just like, do I really want to go and create a brand that does, you know, I don't know, five to 10 million. And I can, but do I really want to do that? Like operating that brand, the idea of like creating my own product sounds fun, but like, do I really want to like have a business deal with inventory and go and fly to mini fat?

20:54Like, no, I think, you know, there's brands that do that well. And I like the brands that are out there and they want to do it more than I do for whatever reasons, like they're driven maybe because they intrinsically love it or they're chasing money or whatever. But for me, it was like, well, what is it? I remember when I sold too, I like looked at the big list of hobbies. Cause I always said, I have no hobbies. Like, you know, I watched, I watched like TV and movies. I worked, I listened to, you know, podcasts, books. Um, and then I hung out with friends. Like that was kind of it. So when I, when I sold, I, I looked at a list of hobbies.

21:29I tried golf, I tried guitar and, um, I just kind of went through different hobbies and like, you know, there was a few that stood out when I was a kid that I was like, okay, I did this when I was a kid. Let me try that. But yeah, starting another business just didn't, didn't scratch that itch. Didn't excite you? No. And again, I'm not going to say never. The thing is, it's funny when I sold my business, I told people, I was like, I'm never going to start anything again. Like I was like, that's, I'm telling you, I'm like a lazy person at heart. Like I don't want, I don't, I don't want to do this again.

21:58And I had done it three times. Like I had other, my other business I had for five years. Like I started it when I was 17 and at its peak, it did 250 grand. Like, and I had a retail store like at 20, like I was doing stuff like before this. So I just didn't, I just, commerce just wasn't something that I wanted to do. Also, a lot of the people in commerce, they loved it. And I just felt like I wasn't connecting with the joy of creating another business. These people were. They wanted to take over. And I just didn't feel that desire anymore. So, yeah, I just wasn't there. Yeah. And look, I think when you've, and I've seen this in friends as well that have sold their business, when you've done the hard yards, you don't really want to go back to that grind, right?

22:49And it almost, for some people, they love it. But for others, it's like, well, that was tough. I don't want to go back to that. Yeah, for sure. And it's funny, I've listened to Alex Ramosi and like Chris Williamson talk about this, but Alex articulated it well where, you know, he loves the game of just of just building a business. Like that's his game that he wants to play. And I respect that. Like, if that's what you love, that's what you get energy from, like, then you're going to be the best at that. You'll sacrifice, you know, time and energy elsewhere to do that thing. And some people create new businesses because they do love running them.

23:30I think some, I've also met people, founders who have exited, who are, as you mentioned, like I have founders who've exited that are completely lost. I have founders who have exited who go and just start another, you know, company with just a different name or slightly different category. And I think they do it not because they necessarily want to, but just because they don't know what else to do. Like they literally don't know what else to do. And it's painful to go and like shed this identity that you have one world that's propping you up. I mean, the e-commerce world, entrepreneur world like I could have kept building my name I could have you know done more podcasts I could have wrote a book like there's a lot of stuff that I could have just done to like become this personality and it just wasn't what it wasn't true to me like it's not what I wanted to do I didn't want to be this expert in that world I still love it I still do there's still love for it like and I like helping people but for me I just knew that there was something it just wasn't that burning feeling kind of inside that you have that I had early days, right?

24:34You know, probably when you had, when you first had that$5 sale and you just, and maybe what you have now, it's just like when, when that's gone, you can't force it just it, it, it, you know, and some people chase the next big, okay, we did a hundred, let's go for 200 million. But like, I just, I, again, I knew, I knew money was not going to make me happier. And I didn't want more. I didn't want to like rub shoulders with people just for the sake of like, oh, I'm wealthy or own powerful or you know successful so i wanted to find something that i just wanted to do at my time my pace that i loved i'm sure after you launched that video where you got half a million views around you sold your company for a hundred million dollars and you felt really lost and all these different things a lot of people would say maybe even watching this was easy for you to kind of say okay well i just want to do what makes me happy a lot like some people just don't have that choice and you've earned that privilege to find out what's next um what would you say to people yeah yeah i guess i think that you have to go through that process so i think you know you have to go through a point where you you i think you have to work towards money right it's hard or work towards something that you really are or you think you can be good at like you have to have some interest i had interest in in in e-commerce it's not like i was doing something that I hated.

25:49I just realized at some point that like I wanted that more of this wasn't going to give me more happiness. So I think that's like, yeah, I think that's kind of where I sit as I was working towards money, but I also enjoyed the experience that I was going through. And then at some point, you know, I just realized that, okay, there's, I do want to start something else outside of this. And I, and I know it's going to take time, but yeah, I did have money also at like 30, I'm 33 now, but it's like, you know, if I was back in my twenties, like I was, I was willing, I went into$5 ,000 of debt to start the company.

26:26Like, you know, had I wanted to do something else, I would have gone into debt, taken a second job to like fund whatever it was that I wanted to do. Like, I think money has to be some motivating factor. I mean, it's, it's just, especially, especially in the States, like you need money to survive everywhere in the world. But like, you know some money is just like it it is a necessary evil um and i think you have to focus on it but if you if you only focus on money and you are miserable with what you're doing like more money is not gonna make you less miserable it could give you the time to then dedicate elsewhere i have a friend who who has a an agency that again he's he enjoys to some degree but it gives him a lot of time to focus on other things and i think that's another example of just yeah money can give you time.

27:14So I don't know. It's like you need money to play the game. So still focus on money, but just understand that more money is not going to make you the happiest person. Especially if you're already unhappy, if you're happy and you're, and you're making money, then great. It'll, it'll probably make you happier. But the more money you make, you alienate yourself from other people, less people can relate. You kind of change relationships, potentially with family, friends. Like it's just the world kind of feels and looks different at times. Did you work out who your true friends are? Yeah, I think like I have a lot of, I had a lot of friends that, um, I just had a lot of friends at the time, a lot of friends because of the business connected to the business employees, this, that I think they're all, I'd still call them all friends.

27:57Right. I don't think I had any like falling outs, but I just think that, um, I just didn't want to talk about the company anymore. I didn't want to talk about the past, you know, I was like winning a sports championship and like talking about it for the next decade. It's like, I like that's, that's, that thing doesn't define me. Right. It's a, it's a big, important moment in my life, but I'm more than just my business than the sale. And I didn't know what that, I didn't know what I wanted to talk about. I just knew I didn't want to talk about this. And that was the hard part. It was like, I was saying yes to anyone who would hang out to learn more about myself and trying to connect with people and moving to new cities and trying new things, which I think is important.

28:40I think that's like a big thing of it is just, you have to try new things. You know, you have to like experiment to learn more about yourself. So what would you say to founders that are in the early stages of their journey to make sure that your identity doesn't get so trapped in the success of your business or not the success of your business, because it is such an all encompassing thing. I think to some degree, you're going to have like, you're gonna have to go through it. You know, I think you're gonna have to like, I think everyone's going to focus on I can tell you whatever I want to tell you, but like, you're gonna your eyes are going to be on the, you know, mission critical.

29:19And that's building the business selling the business getting to a certain revenue, like, that's the dreamers who are just wanting to like accomplish their, you know, kind of goal that they have for themselves. But I think that if I could go back in time, the only thing that I would really have done differently was just try and figure out ways to invest in myself outside of the business. And I think like the health and fitness stuff, like I was drinking a lot too, just not like, not a lot by any means, but just like a lot for me, right? Like I'd go out on weekends or if I would dinners, like business dinners, like I was just, just wasn't treating my body as well as I treat it now.

29:59And I think had I focused more on health, had I invested in certain relationships, I just think those things would have like helped keep me a little bit more balanced. And just think about this. I think also like being self-aware about how like we think and associate identity or money or what our values are in life. Like I think that just helps the transition. So a lot of founders that I have who are trying to like getting ready to sell or hoping to sell just my story i see them like thinking about this stuff earlier you know like before they sell they're already thinking about like fuck well what would i what i do if i sold today where would i live like why am i happy with my life right now is there anything that like is money limiting me right now from being happy or is it just like i could go on a walk today i could go to the gym i can go to a concert like you know like we can a lot of people have the money to do a lot of the things that make them happy, happy day to day.