WEBVTT 1 00:00:00.000 --> 00:00:02.720 The magic you're looking for is in the work you're avoiding. 2 00:00:02.720 --> 00:00:03.720 That's Chris Williamson. 3 00:00:03.720 --> 00:00:05.160 And I think that quote is a perfect quote 4 00:00:05.160 --> 00:00:07.480 that summarizes this, which is, 5 00:00:07.480 --> 00:00:09.480 do you know the business you're really in? 6 00:00:09.480 --> 00:00:13.520 And the right type of hard versus the wrong type of hard 7 00:00:13.520 --> 00:00:15.760 and when to push and when to pivot. 8 00:00:15.760 --> 00:00:18.440 And how you can unlock the greatest amount 9 00:00:18.440 --> 00:00:19.880 of enterprise value in your business 10 00:00:19.880 --> 00:00:22.880 that sits on the other side of that hard road. 11 00:00:22.880 --> 00:00:24.680 In the very beginning, what I got in the gym business, 12 00:00:24.680 --> 00:00:27.000 I thought the gym business was about results. 13 00:00:27.000 --> 00:00:28.400 I thought it was about results 14 00:00:28.400 --> 00:00:32.240 and I thought it was about killer workouts. 15 00:00:32.240 --> 00:00:35.200 And it was really about neither of those things. 16 00:00:36.160 --> 00:00:39.000 The gym business is actually about sales and marketing. 17 00:00:39.000 --> 00:00:40.440 And so I got into it because I was like, 18 00:00:40.440 --> 00:00:41.680 I'm passionate about fitness. 19 00:00:41.680 --> 00:00:43.000 I'm passionate about getting people results. 20 00:00:43.000 --> 00:00:46.200 But what actually drove the business economics 21 00:00:46.200 --> 00:00:48.040 with sales and marketing and the big problem is that 22 00:00:48.040 --> 00:00:49.160 with gyms, as you might imagine, 23 00:00:49.160 --> 00:00:52.000 a lot of people don't actually like going to the gym 24 00:00:52.000 --> 00:00:53.880 like it has inherent difficulties. 25 00:00:53.880 --> 00:00:55.080 The good news in the gym business 26 00:00:55.080 --> 00:00:56.600 is that everybody wants to get in better shape. 27 00:00:56.600 --> 00:00:58.320 And so you have this massive market 28 00:00:58.320 --> 00:01:00.440 but people tend to turn out of gyms. 29 00:01:00.440 --> 00:01:01.880 Even the very low cost gyms, 30 00:01:01.880 --> 00:01:04.000 like a lot of people have this misbelief 31 00:01:04.000 --> 00:01:05.320 that they think like, oh, we'll plan a fitness 32 00:01:05.320 --> 00:01:06.640 or crunch fitness is 10 bucks a month. 33 00:01:06.640 --> 00:01:07.760 So of course, no one cancels. 34 00:01:07.760 --> 00:01:10.400 But they actually have five or six percent monthly churn. 35 00:01:10.400 --> 00:01:11.600 They just have a ton of people 36 00:01:11.600 --> 00:01:13.000 who sign up every month as well. 37 00:01:13.000 --> 00:01:15.800 And so the key that I didn't know 38 00:01:15.800 --> 00:01:18.000 is that the businesses that are the biggest 39 00:01:18.000 --> 00:01:19.920 in the fitness space, and this is what I got into it, 40 00:01:19.920 --> 00:01:21.920 was actually just marketing and sales machines. 41 00:01:21.920 --> 00:01:23.800 They know how to train sales and how to recruit for sales 42 00:01:23.800 --> 00:01:25.680 and how to market on a number of different channels 43 00:01:25.680 --> 00:01:26.760 to get customers in the door. 44 00:01:26.760 --> 00:01:27.840 And so once I learned that, 45 00:01:27.840 --> 00:01:30.400 I started growing my gyms and I started realizing 46 00:01:30.400 --> 00:01:32.440 that was the business I was really in. 47 00:01:32.440 --> 00:01:35.120 Then later on, I got into prestige labs 48 00:01:35.120 --> 00:01:36.480 which are my subliminal business. 49 00:01:36.480 --> 00:01:38.560 And I thought that I was in the product business. 50 00:01:38.560 --> 00:01:40.480 So I thought it was gonna be about all the ingredients 51 00:01:40.480 --> 00:01:41.320 that I was using. 52 00:01:41.320 --> 00:01:43.560 I thought it was gonna be about like how efficacious 53 00:01:43.560 --> 00:01:44.960 and all the studies that we could prove. 54 00:01:44.960 --> 00:01:47.600 And so I got Dr. Cashy who's a genius biochemist, 55 00:01:47.600 --> 00:01:49.880 got his PhD when he was 20 years old 56 00:01:49.880 --> 00:01:52.000 in biochemistry which is absolutely absurd. 57 00:01:52.000 --> 00:01:53.640 And I got him and he was, you know, 58 00:01:53.640 --> 00:01:56.040 he did all the stacks for the Olympic teams 59 00:01:56.040 --> 00:01:56.880 and things like that. 60 00:01:56.960 --> 00:01:58.560 I was like, okay, I'm gonna have the best smartest person 61 00:01:58.560 --> 00:02:01.200 in the world make the absolute most efficacious product 62 00:02:01.200 --> 00:02:02.400 with the best ingredients. 63 00:02:02.400 --> 00:02:05.120 But that wasn't actually the business I was in. 64 00:02:05.120 --> 00:02:07.120 In the subliminal business, 65 00:02:07.120 --> 00:02:09.280 it's about brand media and distribution. 66 00:02:09.280 --> 00:02:11.040 Like that's actually the business you're in. 67 00:02:11.040 --> 00:02:13.280 And especially if you have products 68 00:02:13.280 --> 00:02:14.920 that don't have a flavoring. 69 00:02:14.920 --> 00:02:17.440 So if you have capsules of any sort, 70 00:02:17.440 --> 00:02:21.200 then it really is just about brand and distribution. 71 00:02:21.200 --> 00:02:26.200 Now if you have a product that is like an AG1, right? 72 00:02:26.480 --> 00:02:28.960 Now people buy AG1 because obviously they're exceptional 73 00:02:28.960 --> 00:02:30.640 at media, they're great at traffic, 74 00:02:30.640 --> 00:02:32.280 they're really just traffic machines. 75 00:02:32.280 --> 00:02:34.960 But people keep buying it because it tastes good, right? 76 00:02:34.960 --> 00:02:36.320 And so like they think it's like, 77 00:02:36.320 --> 00:02:38.520 oh, I'm gonna, it's because of all these little ingredients 78 00:02:38.520 --> 00:02:40.800 in there but like you don't feel healthy. 79 00:02:40.800 --> 00:02:43.680 Like you don't know if you're levels of whatever are changing. 80 00:02:43.680 --> 00:02:44.600 You just know if it tastes good 81 00:02:44.600 --> 00:02:46.080 and if you create a habit around it. 82 00:02:46.080 --> 00:02:48.640 And so again, in that business, 83 00:02:48.640 --> 00:02:50.560 it took me two longs realized that I was actually 84 00:02:50.560 --> 00:02:51.600 not in the product business. 85 00:02:51.600 --> 00:02:54.280 Again, I was in the median distribution business. 86 00:02:54.280 --> 00:02:55.400 Then when I got into Allen, 87 00:02:55.400 --> 00:02:56.880 which was my software company, 88 00:02:56.880 --> 00:02:59.800 I thought that I was like, okay, I've learned my lesson. 89 00:02:59.800 --> 00:03:01.240 This is all about marketing and sales. 90 00:03:01.240 --> 00:03:02.960 Like this is software, I get it. 91 00:03:02.960 --> 00:03:04.000 I've learned my lesson. 92 00:03:04.000 --> 00:03:05.920 And as soon as I got into the software business, 93 00:03:05.920 --> 00:03:07.720 I knew I could sell everybody the software. 94 00:03:07.720 --> 00:03:10.840 The problem was I had to actually make a better product 95 00:03:10.840 --> 00:03:13.320 because with tech, especially, 96 00:03:13.320 --> 00:03:16.160 it fundamentally automates some element of work, right? 97 00:03:16.160 --> 00:03:17.400 That's what software does. 98 00:03:17.400 --> 00:03:18.520 Is it automates something? 99 00:03:18.520 --> 00:03:20.720 And so if something can be done precisely 100 00:03:20.720 --> 00:03:22.360 and done accurately and done quickly 101 00:03:22.360 --> 00:03:23.600 and with software ideally, 102 00:03:23.640 --> 00:03:25.720 it's done cheaply or cheaper than people, 103 00:03:25.720 --> 00:03:27.320 because that's how tech works in general, 104 00:03:27.320 --> 00:03:29.560 then that's an easy thing to sell. 105 00:03:29.560 --> 00:03:32.080 Who doesn't want good, fast, cheaper, better? 106 00:03:32.080 --> 00:03:32.840 Everybody does. 107 00:03:32.840 --> 00:03:35.080 And so it's very easy, or at least in my experience, 108 00:03:35.080 --> 00:03:36.280 who's very easy to sell software 109 00:03:36.280 --> 00:03:37.280 if you have a good product market fit 110 00:03:37.280 --> 00:03:38.920 in terms of what you're trying to sell. 111 00:03:38.920 --> 00:03:40.400 The problem was that my product 112 00:03:40.400 --> 00:03:42.280 wasn't good enough to deliver on the promise. 113 00:03:42.280 --> 00:03:44.760 And so I got into it and was like, okay, cool. 114 00:03:44.760 --> 00:03:46.680 I'll just hire an outsourced development team 115 00:03:46.680 --> 00:03:48.920 and they'll just build me whatever hours, 116 00:03:48.920 --> 00:03:49.760 they'll get the product done 117 00:03:49.760 --> 00:03:50.760 and then I'll market and sell it. 118 00:03:50.760 --> 00:03:51.960 And sure, we sold a ton. 119 00:03:51.960 --> 00:03:54.880 I mean, we went to 1.7 million a month in six months 120 00:03:54.880 --> 00:03:57.160 in terms of run rate. 121 00:03:58.840 --> 00:04:00.320 And that was per month, 1.7 million. 122 00:04:00.320 --> 00:04:01.320 And so the thing is, 123 00:04:01.320 --> 00:04:02.720 we were able to sell the crap out of it. 124 00:04:02.720 --> 00:04:05.760 But I then quickly realized that the product 125 00:04:05.760 --> 00:04:08.280 just couldn't deliver and then I was like, oh shoot. 126 00:04:08.280 --> 00:04:11.000 I have this outsourced team that owns the product 127 00:04:11.000 --> 00:04:12.880 and that's not their core business 128 00:04:12.880 --> 00:04:15.600 because they're really just a shop that sells to anybody. 129 00:04:15.600 --> 00:04:17.040 And they're incentive is to just build me 130 00:04:17.040 --> 00:04:18.280 as much as seemingly possible. 131 00:04:18.280 --> 00:04:20.960 By the way, if you run revenue through any kind of software, 132 00:04:20.960 --> 00:04:23.280 as soon as the development shop sees how much money 133 00:04:23.280 --> 00:04:25.640 you're making, guess what happens to your fees? 134 00:04:25.640 --> 00:04:28.280 They go up and unless you have someone who can check them 135 00:04:28.280 --> 00:04:31.160 and knows how to code or knows how to at least 136 00:04:31.160 --> 00:04:34.280 QA them, you're screwed, you're hammered. 137 00:04:34.280 --> 00:04:36.400 And so I had no technical proficiency myself. 138 00:04:36.400 --> 00:04:37.960 I had nobody on my internal team 139 00:04:37.960 --> 00:04:40.160 that was like a WT employee or at least an equity employee, 140 00:04:40.160 --> 00:04:43.120 anybody who actually knew code. 141 00:04:43.120 --> 00:04:46.040 And so I was absolutely at their mercy and it sucked. 142 00:04:46.040 --> 00:04:48.360 And so in that business and software business, 143 00:04:48.360 --> 00:04:50.040 you think you might be getting in the marketing sales business 144 00:04:50.040 --> 00:04:51.800 but you're really becoming into the product business 145 00:04:51.800 --> 00:04:54.600 because if you fundamentally can make that promise 146 00:04:54.600 --> 00:04:58.440 which is good or faster, cheaper or then people are going to buy. 147 00:04:58.440 --> 00:05:00.480 But you have to make sure that you can fulfill that promise. 148 00:05:00.480 --> 00:05:02.600 And so I learned that lesson too late. 149 00:05:02.600 --> 00:05:05.760 We ended up selling it to a strategic buyer 150 00:05:05.760 --> 00:05:08.080 who could incorporate it into their big development team. 151 00:05:08.080 --> 00:05:09.160 He was like, I can rewrite the code, 152 00:05:09.160 --> 00:05:10.600 you already have a big customer base 153 00:05:10.600 --> 00:05:12.920 and we did an all stock deal. 154 00:05:12.920 --> 00:05:16.120 Now I'll tell you a story that kind of made me think about 155 00:05:16.120 --> 00:05:17.800 this was the first thing that actually got me 156 00:05:17.800 --> 00:05:20.280 into this thinking process of what business are you really in. 157 00:05:20.280 --> 00:05:22.920 And so one of our gym owners from way back when 158 00:05:22.920 --> 00:05:26.240 when we had gym launch was a successful gym owner 159 00:05:26.240 --> 00:05:28.120 and he started making money with his gyms. 160 00:05:28.120 --> 00:05:29.600 And so he started buying Airbnb 161 00:05:29.600 --> 00:05:31.040 since that was kind of like his investment strategy. 162 00:05:31.040 --> 00:05:33.520 So he started buying Airbnb's in his local area. 163 00:05:33.520 --> 00:05:35.520 And what ended up happening was he was like, 164 00:05:35.520 --> 00:05:37.000 you know what, if I can drive margins up 165 00:05:37.000 --> 00:05:38.520 by just cleaning the houses myself 166 00:05:38.520 --> 00:05:40.080 instead of outsourcing the cleaning. 167 00:05:40.080 --> 00:05:42.560 And so if you have an Airbnb, especially daily rentals 168 00:05:42.560 --> 00:05:45.680 like the cleaning is actually a pretty big part of the business. 169 00:05:45.800 --> 00:05:47.840 And so he started hiring his own cleaning staff 170 00:05:47.840 --> 00:05:49.360 and doing the cleaning. 171 00:05:49.360 --> 00:05:52.400 But he was like, wow, you know what, 172 00:05:52.400 --> 00:05:53.680 this cleaning business, I could start cleaning 173 00:05:53.680 --> 00:05:55.400 for other Airbnb's, right? 174 00:05:55.400 --> 00:05:57.320 And so he starts cleaning for other Airbnb's 175 00:05:57.320 --> 00:05:59.200 and he's like, okay, this is actually a business. 176 00:05:59.200 --> 00:06:01.680 And so he used all the stuff he knew from running his gym 177 00:06:01.680 --> 00:06:02.880 which he knew how to market himself 178 00:06:02.880 --> 00:06:04.000 because that's the real business you're in 179 00:06:04.000 --> 00:06:05.160 when you're in the gym business. 180 00:06:05.160 --> 00:06:07.240 And so he starts marketing some and we, 181 00:06:07.240 --> 00:06:09.760 I had dinner with him probably a year into the business 182 00:06:09.760 --> 00:06:11.920 and he was like, so I said, okay, give me LTV, 183 00:06:11.920 --> 00:06:13.200 give me a cat, like how's it work? 184 00:06:13.200 --> 00:06:16.360 He's like, oh, LTV is insane. 185 00:06:16.360 --> 00:06:19.440 People never cancel and CAC is like $6. 186 00:06:19.440 --> 00:06:21.920 And I was like, oh my God, 187 00:06:21.920 --> 00:06:23.920 like why are you not making gazillions of dollars? 188 00:06:23.920 --> 00:06:27.200 He's like, you know, the issue is actually talent. 189 00:06:27.200 --> 00:06:29.840 It's actually getting people who clean houses 190 00:06:29.840 --> 00:06:31.680 who show up on time and do a good job 191 00:06:31.680 --> 00:06:33.200 and don't steal and speak English 192 00:06:33.200 --> 00:06:34.560 and communicate with customers. 193 00:06:34.560 --> 00:06:36.840 He's like, that's actually the issue. 194 00:06:36.840 --> 00:06:38.640 And it was right in that moment I was like, 195 00:06:38.640 --> 00:06:41.680 oh, this business isn't like the other business you was in. 196 00:06:42.400 --> 00:06:44.200 This isn't a gym business, even though it's a local business, 197 00:06:44.200 --> 00:06:45.480 even though it's service. 198 00:06:45.480 --> 00:06:46.720 If you're in the cleaning business, 199 00:06:46.720 --> 00:06:48.200 you're not in the marketing and sales business 200 00:06:48.200 --> 00:06:49.800 because selling someone on, 201 00:06:49.800 --> 00:06:51.480 let me clean your house and do the stuff for you. 202 00:06:51.480 --> 00:06:53.120 Not that hard, right? 203 00:06:53.120 --> 00:06:55.280 And getting people to opt in for cleaning ads, 204 00:06:55.280 --> 00:06:57.720 not that difficult, selling them, not that hard. 205 00:06:57.720 --> 00:06:59.680 The hard part is actually delivering on it 206 00:06:59.680 --> 00:07:01.680 and getting people who want to do it on regular basis. 207 00:07:01.680 --> 00:07:03.520 So I'll give you an example on the counter side. 208 00:07:03.520 --> 00:07:07.840 For gyms, getting talent, getting trainers, 209 00:07:07.840 --> 00:07:09.400 getting people who are fitness enthusiasts 210 00:07:09.400 --> 00:07:12.040 who want to train other people, 211 00:07:12.040 --> 00:07:13.920 people do it for free. 212 00:07:13.920 --> 00:07:15.840 Like people like working out. 213 00:07:15.840 --> 00:07:18.080 People, well, I'll say people who like working out, 214 00:07:18.080 --> 00:07:19.240 like working out, just put it that way. 215 00:07:19.240 --> 00:07:20.560 Like there are obviously people who hate working out 216 00:07:20.560 --> 00:07:22.120 but there are people who are fitness enthusiasts. 217 00:07:22.120 --> 00:07:24.520 Now, I have not seen a cleaning enthusiast. 218 00:07:24.520 --> 00:07:26.400 There's not this under, you know, 219 00:07:26.400 --> 00:07:27.760 this underworld of all these people are like, 220 00:07:27.760 --> 00:07:29.960 man, I'm just a cleaning enthusiast. 221 00:07:29.960 --> 00:07:31.520 I mean, there are maybe some people, 222 00:07:31.520 --> 00:07:33.600 but the vast majority of people see it as a chore, right? 223 00:07:33.600 --> 00:07:36.680 And so getting talent for gyms is not hard, 224 00:07:36.680 --> 00:07:38.480 getting talent for cleaning much harder. 225 00:07:38.520 --> 00:07:40.640 And so once we started walking through this, 226 00:07:40.640 --> 00:07:42.960 I was like, oh, you're in the recruiting 227 00:07:42.960 --> 00:07:44.520 and training business. 228 00:07:44.520 --> 00:07:46.400 And I just saw his whole ice change. 229 00:07:46.400 --> 00:07:48.280 I was like, okay, think about it like this. 230 00:07:48.280 --> 00:07:50.280 You know how to acquire customers. 231 00:07:50.280 --> 00:07:52.680 You have to market, you generate leads, you work the leads, 232 00:07:52.680 --> 00:07:55.360 you have a sales call and then you onboard them 233 00:07:55.360 --> 00:07:56.840 and then you retain them and you send them. 234 00:07:56.840 --> 00:07:58.120 I was like, we need to flip that. 235 00:07:58.120 --> 00:07:59.320 And so you need to think about, 236 00:07:59.320 --> 00:08:01.600 what is my acquisition for talent? 237 00:08:01.600 --> 00:08:03.920 How do I generate leads and applications for talent? 238 00:08:03.920 --> 00:08:05.880 Instead of sales, how do I interview? 239 00:08:05.880 --> 00:08:07.760 Instead of onboarding customers, 240 00:08:07.880 --> 00:08:09.920 how do I onboard a new employee? 241 00:08:09.920 --> 00:08:12.360 And how do I train them so that they can be proficient 242 00:08:12.360 --> 00:08:14.600 so that I can then manage or ascend them 243 00:08:14.600 --> 00:08:16.000 up inside of the organization? 244 00:08:16.000 --> 00:08:17.480 And so as soon as he flipped that, 245 00:08:17.480 --> 00:08:19.400 he took the business from, I think it was like 30 246 00:08:19.400 --> 00:08:22.720 or $40,000 a month to over $150,000 a month 247 00:08:22.720 --> 00:08:24.720 with the next 12 months. 248 00:08:24.720 --> 00:08:27.360 And he was just that idea of, oh, 249 00:08:27.360 --> 00:08:30.080 this is the big hairy problem I have to solve. 250 00:08:30.080 --> 00:08:33.400 And so every business has a big hairy problem. 251 00:08:33.400 --> 00:08:36.200 And this has just been my own experiences that, 252 00:08:36.200 --> 00:08:38.360 because I'm probably just an Indian or an idiot, 253 00:08:38.360 --> 00:08:40.600 I only learned about it once I get into it. 254 00:08:40.600 --> 00:08:41.720 And so as a recommendation, 255 00:08:41.720 --> 00:08:44.240 if you are gonna enter into a new marketplace, 256 00:08:44.240 --> 00:08:45.520 talk to people and ask them 257 00:08:45.520 --> 00:08:47.320 what the hardest part of their business is. 258 00:08:47.320 --> 00:08:49.200 And so I'll give you two more examples of this 259 00:08:49.200 --> 00:08:51.320 and then I'll transition to kind of why 260 00:08:51.320 --> 00:08:52.680 I think this is important overall. 261 00:08:52.680 --> 00:08:54.880 So a lot of people who follow me 262 00:08:54.880 --> 00:08:56.160 just because they're in the consulting 263 00:08:56.160 --> 00:08:57.280 or the coaching of the information 264 00:08:57.280 --> 00:08:58.120 of the education system, 265 00:08:58.120 --> 00:08:59.480 cause I talk about that stuff a lot. 266 00:08:59.480 --> 00:09:02.040 Now, the thing is is if you're in that space, 267 00:09:02.040 --> 00:09:03.880 what business do you think you're in? 268 00:09:03.880 --> 00:09:05.920 Now, you have to learn how to market itself. 269 00:09:05.960 --> 00:09:08.000 That's any business, right? 270 00:09:08.000 --> 00:09:10.360 But if you want to make it big, 271 00:09:10.360 --> 00:09:12.960 look at the biggest consulting firms, 272 00:09:12.960 --> 00:09:15.240 professional service businesses in the world. 273 00:09:15.240 --> 00:09:16.080 What are they? 274 00:09:16.080 --> 00:09:17.360 You look at McKinsey, you look at Bane, 275 00:09:17.360 --> 00:09:19.920 you look at Ernst & Young, you look at KPMG, 276 00:09:19.920 --> 00:09:21.520 you look at the biggest firms accounting, 277 00:09:21.520 --> 00:09:23.280 you look at law, you look at consulting, 278 00:09:23.280 --> 00:09:24.920 what are, what are they? 279 00:09:24.920 --> 00:09:27.040 They're recruiting machines. 280 00:09:27.040 --> 00:09:30.080 And it's because they know how to attract talent, 281 00:09:30.080 --> 00:09:32.840 train talent and make people more valuable 282 00:09:32.840 --> 00:09:35.120 and they get the best and brightest people. 283 00:09:35.200 --> 00:09:37.760 And so the reason that people can't quote scale 284 00:09:37.760 --> 00:09:40.080 in these information coaching, et cetera, businesses 285 00:09:40.080 --> 00:09:42.240 is because they have one talented person, 286 00:09:42.240 --> 00:09:45.880 which is the guru, and then they hire a bunch of minions 287 00:09:45.880 --> 00:09:47.960 or people who are not even close to as good as that person. 288 00:09:47.960 --> 00:09:49.840 And then over time, what happens is you dilute 289 00:09:49.840 --> 00:09:52.160 the level of service and it's a service-based business. 290 00:09:52.160 --> 00:09:54.800 And so people are like, man, this thing sucks 291 00:09:54.800 --> 00:09:56.560 or this guy sucks or this business sucks. 292 00:09:56.560 --> 00:10:01.560 But McKinsey, Bane, BCG, EY, those are built on the principle 293 00:10:01.960 --> 00:10:03.600 of how do we continue to raise the bar, 294 00:10:03.600 --> 00:10:05.480 how do we get better, brighter, smarter people, 295 00:10:05.480 --> 00:10:07.160 and how do we train them better than anyone else 296 00:10:07.160 --> 00:10:09.640 in a faster way so we can get better returns on human capital 297 00:10:09.640 --> 00:10:10.720 as end the people themselves. 298 00:10:10.720 --> 00:10:13.440 How do we get better returns on the humans? 299 00:10:13.440 --> 00:10:15.040 And so that's the fundamental arbitrage 300 00:10:15.040 --> 00:10:16.000 if you're in a service-based business 301 00:10:16.000 --> 00:10:18.320 where you sell expertise is the return 302 00:10:18.320 --> 00:10:20.920 on the arbitrage between what you pay somebody 303 00:10:20.920 --> 00:10:22.760 and what you can charge for that person's expertise. 304 00:10:22.760 --> 00:10:24.640 Now, the difficulty in that business is that when you train 305 00:10:24.640 --> 00:10:25.680 someone and they become really exception, 306 00:10:25.680 --> 00:10:27.480 they become really smart, what do they have? 307 00:10:27.480 --> 00:10:28.600 They have opportunities to leave, 308 00:10:28.600 --> 00:10:29.880 they can take those clients with them. 309 00:10:29.880 --> 00:10:32.320 And so there's a reason that most of these professional 310 00:10:32.360 --> 00:10:34.880 service firms at scale become partnerships. 311 00:10:34.880 --> 00:10:36.360 They become LLP's. 312 00:10:36.360 --> 00:10:38.920 So you have, I become a partner at McKinsey. 313 00:10:38.920 --> 00:10:40.520 I become a partner at the law firm. 314 00:10:40.520 --> 00:10:42.200 I become a partner at the accounting firm 315 00:10:42.200 --> 00:10:45.840 because if you have a ton of very, very smart motivated people, 316 00:10:45.840 --> 00:10:48.080 they eventually will leave to start their own business 317 00:10:48.080 --> 00:10:49.280 or you have to show them a path 318 00:10:49.280 --> 00:10:51.320 where they can become an owner within the business they're in. 319 00:10:51.320 --> 00:10:52.920 And this is just playing it out. 320 00:10:52.920 --> 00:10:54.160 And so this is why I bring this up 321 00:10:54.160 --> 00:10:56.000 because a lot of people don't know what it looks like at scale. 322 00:10:56.000 --> 00:10:58.120 Like you have to bring in very intelligent people 323 00:10:58.120 --> 00:11:00.320 and have a system or incentive process 324 00:11:00.320 --> 00:11:03.480 that gives them a taste in the long run 325 00:11:03.480 --> 00:11:05.400 so that the opportunity or the risk 326 00:11:05.400 --> 00:11:07.840 adjusted return of them leaving versus them staying, 327 00:11:07.840 --> 00:11:09.440 it still makes more sense for them to stay 328 00:11:09.440 --> 00:11:11.560 or at least for a good portion of them to stay. 329 00:11:11.560 --> 00:11:12.760 Now, I'll give you a more example 330 00:11:12.760 --> 00:11:14.600 and then I'll flip it to why I think this is important 331 00:11:14.600 --> 00:11:16.320 in terms of identifying this for your own business. 332 00:11:16.320 --> 00:11:20.520 So investing, I thought it was about doing lots of deals 333 00:11:20.520 --> 00:11:22.400 at good prices and to some degree it is, 334 00:11:22.400 --> 00:11:23.920 but in reality, in least in my experience, 335 00:11:23.920 --> 00:11:26.360 it's been way more about learning how to say no 336 00:11:26.360 --> 00:11:30.240 at a much higher velocity to a much higher number of deals. 337 00:11:30.240 --> 00:11:32.280 Because you only need one Facebook. 338 00:11:32.280 --> 00:11:34.160 And so it's kind of this counterintuitive thing 339 00:11:34.160 --> 00:11:37.960 where you have power law that starts really, really leveling out. 340 00:11:37.960 --> 00:11:41.720 So like we did 22 deals over the last two and a half years 341 00:11:41.720 --> 00:11:44.360 and four of those deals are the ones 342 00:11:44.360 --> 00:11:47.120 that are 90% of the returns that we have. 343 00:11:47.120 --> 00:11:48.600 And there's so many of the deals that we did 344 00:11:48.600 --> 00:11:49.600 where I'm like, man, that was, 345 00:11:49.600 --> 00:11:51.720 it's literally just a complete waste of my time. 346 00:11:51.720 --> 00:11:53.640 Like, waste of money, waste of time, 347 00:11:53.640 --> 00:11:55.560 because I can get so much more taking 348 00:11:55.560 --> 00:11:56.720 that the large community of them 349 00:11:56.720 --> 00:11:58.440 probably is about $100 million a year. 350 00:11:58.440 --> 00:12:02.080 If I can get that up to going from 100 to 150 million 351 00:12:02.080 --> 00:12:05.400 is actually the same level of work sometimes easier 352 00:12:05.400 --> 00:12:09.000 than going from zero to one million or one to 10 million. 353 00:12:09.000 --> 00:12:11.880 Like, and it's 50 million in absolute. 354 00:12:11.880 --> 00:12:13.880 And you also get a premium on the EBITDA, 355 00:12:13.880 --> 00:12:16.560 meaning the take home, I'll put you to that in quotes, 356 00:12:16.560 --> 00:12:20.920 for the business is that it's the reverse of buying 357 00:12:20.920 --> 00:12:22.520 where you get economies of scale 358 00:12:22.520 --> 00:12:24.720 where you lower the price when you get bigger. 359 00:12:24.720 --> 00:12:27.840 With businesses, you get a scale premium. 360 00:12:27.840 --> 00:12:30.880 You get paid more for the profit that you get 361 00:12:30.880 --> 00:12:32.920 when the profit is an absolutely bigger. 362 00:12:32.920 --> 00:12:34.880 And so you get more and more. 363 00:12:34.880 --> 00:12:36.200 It's easier to grow them bigger 364 00:12:36.200 --> 00:12:37.800 and you get more for the growth you get. 365 00:12:37.800 --> 00:12:40.040 And so this is where like getting more for the effort 366 00:12:40.040 --> 00:12:41.520 that you put in becomes really important. 367 00:12:41.520 --> 00:12:43.560 And I didn't know that when I got into the business. 368 00:12:43.560 --> 00:12:45.080 And so for each of these businesses, 369 00:12:45.080 --> 00:12:46.360 I had these big learning curves where it's like, 370 00:12:46.360 --> 00:12:48.560 okay, this is what I think the business is about. 371 00:12:48.560 --> 00:12:49.800 And then you get into it and you're like, 372 00:12:49.800 --> 00:12:51.720 oh, this is what the business is really about. 373 00:12:51.720 --> 00:12:54.680 This is the big, hairy problem that I really have to solve. 374 00:12:54.680 --> 00:12:57.760 And so the thing is that at least I had the day yesterday 375 00:12:58.000 --> 00:12:59.000 where I talked to these business owners 376 00:12:59.000 --> 00:13:00.520 and it became clear for a handful of them 377 00:13:00.520 --> 00:13:01.560 that they were plateaued 378 00:13:01.560 --> 00:13:03.400 because they actually didn't know what business they were in. 379 00:13:03.400 --> 00:13:04.760 They were kind of like that gym owner 380 00:13:04.760 --> 00:13:05.600 who got into the cleaning. 381 00:13:05.600 --> 00:13:07.440 He was like, man, this is tough 382 00:13:07.440 --> 00:13:09.080 because he kept looking at marketing and sales. 383 00:13:09.080 --> 00:13:11.000 He was like, what do I need to do differently here? 384 00:13:11.000 --> 00:13:12.320 When the reality was the constraint of the business 385 00:13:12.320 --> 00:13:14.640 was actually a different big, hairy problem. 386 00:13:14.640 --> 00:13:16.480 And the good news for us as entrepreneurs 387 00:13:16.480 --> 00:13:19.360 is that we get paid to solve that problem. 388 00:13:19.360 --> 00:13:21.280 We get paid very well to solve that problem. 389 00:13:21.280 --> 00:13:24.440 And so what's interesting is that a lot of entrepreneurs 390 00:13:24.440 --> 00:13:27.040 will restart the cycle over and over and over again 391 00:13:27.040 --> 00:13:30.600 because they say, so using that cleaning gym owner example, 392 00:13:30.600 --> 00:13:33.320 he might say, okay, now if we hadn't had that conversation, 393 00:13:33.320 --> 00:13:35.040 he might start yet another business 394 00:13:35.040 --> 00:13:36.160 where he can market and sell 395 00:13:36.160 --> 00:13:37.920 because he'd learn how to solve those problems. 396 00:13:37.920 --> 00:13:40.560 So he knows how to beat the level one and the level two boss. 397 00:13:40.560 --> 00:13:42.320 But as soon as he comes to level three boss, 398 00:13:42.320 --> 00:13:43.480 which is a completely different skill 399 00:13:43.480 --> 00:13:44.560 so that he needed to have, 400 00:13:44.560 --> 00:13:46.480 he just stops and starts into their opportunity. 401 00:13:46.480 --> 00:13:49.280 And so this is what is so deceptive 402 00:13:49.280 --> 00:13:50.480 about the woman in the red dress. 403 00:13:50.480 --> 00:13:52.800 Is that, when I say, if you're new to my stuff, 404 00:13:52.800 --> 00:13:54.840 the woman in the red dress is the distractions, 405 00:13:54.840 --> 00:13:55.680 the shiny object. 406 00:13:56.240 --> 00:13:58.480 It's the opportunity that looks more appealing 407 00:13:58.480 --> 00:13:59.680 with the current skill set you have. 408 00:13:59.680 --> 00:14:02.280 You say, she whispers to you and she says, 409 00:14:02.280 --> 00:14:04.360 listen, you're marketing and selling over there. 410 00:14:04.360 --> 00:14:06.720 If you just had the same skill set with me, 411 00:14:06.720 --> 00:14:07.560 it'd be better. 412 00:14:07.560 --> 00:14:08.800 It'd be so much better. 413 00:14:08.800 --> 00:14:11.200 But it's false because what she doesn't tell you 414 00:14:11.200 --> 00:14:12.520 is that she's absolutely fucking crazy 415 00:14:12.520 --> 00:14:14.160 in all these other ways that you didn't know about. 416 00:14:14.160 --> 00:14:15.000 And then when you get in better, 417 00:14:15.000 --> 00:14:15.840 whether you're like, oh my God, 418 00:14:15.840 --> 00:14:16.920 she has six personalities. 419 00:14:16.920 --> 00:14:18.000 This is crazy, right? 420 00:14:18.000 --> 00:14:20.440 And so the thing is is that 421 00:14:20.440 --> 00:14:21.880 that is what most opportunities look like. 422 00:14:21.880 --> 00:14:23.000 You have uninformed optimism 423 00:14:23.000 --> 00:14:24.720 because you think this is the business 424 00:14:24.760 --> 00:14:26.360 that you're getting into and then you get into bed 425 00:14:26.360 --> 00:14:27.440 with that business and you realize 426 00:14:27.440 --> 00:14:28.600 this is the real business. 427 00:14:28.600 --> 00:14:30.240 She actually has a baby daddy 428 00:14:30.240 --> 00:14:31.600 and she's got a kid she didn't tell you about. 429 00:14:31.600 --> 00:14:33.760 And you're like, oh, I did not sign up for this. 430 00:14:33.760 --> 00:14:35.440 But now you got a whole host of problems. 431 00:14:35.440 --> 00:14:36.480 You got to solve and you got to decide 432 00:14:36.480 --> 00:14:38.240 whether the types of problems you want to solve. 433 00:14:38.240 --> 00:14:42.400 And so this is why so many entrepreneurs 434 00:14:42.400 --> 00:14:45.440 start and keep starting businesses and starting over 435 00:14:45.440 --> 00:14:46.880 and they get to the same size 436 00:14:46.880 --> 00:14:49.160 and then they just move over to another woman of the red dress 437 00:14:49.160 --> 00:14:50.280 who promises a different outcome 438 00:14:50.280 --> 00:14:51.160 with the same skills they have 439 00:14:51.160 --> 00:14:52.200 and they get to the same level. 440 00:14:52.200 --> 00:14:53.640 They get the same level of revenue 441 00:14:53.640 --> 00:14:55.400 because they don't know how to break past it 442 00:14:55.400 --> 00:14:58.240 because they don't know the actual business. 443 00:14:58.240 --> 00:14:59.080 They're in. 444 00:15:00.240 --> 00:15:02.600 And so they keep beating the same bosses 445 00:15:02.600 --> 00:15:04.240 because they're comfortable there. 446 00:15:04.240 --> 00:15:05.800 And so what happens is in the beginning 447 00:15:05.800 --> 00:15:06.720 you don't make any money. 448 00:15:06.720 --> 00:15:08.760 You learn how to beat one boss, you start making money. 449 00:15:08.760 --> 00:15:10.720 And you're like, oh, let me see if I can beat that boss 450 00:15:10.720 --> 00:15:13.160 over and over again in different businesses 451 00:15:13.160 --> 00:15:14.240 and that's how I'm going to grow. 452 00:15:14.240 --> 00:15:16.520 But it's not that you have to beat a new boss every time. 453 00:15:16.520 --> 00:15:18.440 And the hard work is figuring out 454 00:15:18.440 --> 00:15:21.480 the hairier the hairy problem in front of you. 455 00:15:21.480 --> 00:15:23.080 And it's usually the thing that we don't want to confront 456 00:15:23.080 --> 00:15:24.640 because sometimes it makes us feel bad about ourselves. 457 00:15:24.640 --> 00:15:27.360 Sometimes we're like, well, maybe my product just isn't that good. 458 00:15:27.360 --> 00:15:28.720 Oh, wow, I have to learn coding. 459 00:15:28.720 --> 00:15:30.400 Oh, I have to bring technical talent in. 460 00:15:30.400 --> 00:15:31.680 Well, I've never done that before. 461 00:15:31.680 --> 00:15:34.040 Well, guess what, that's what you got to do 462 00:15:34.040 --> 00:15:35.480 if you want to make this thing go big. 463 00:15:35.480 --> 00:15:37.400 And so what's interesting about this, 464 00:15:37.400 --> 00:15:39.040 and this is my kind of like word of encouragement 465 00:15:39.040 --> 00:15:41.040 for whatever business you're in, 466 00:15:41.040 --> 00:15:42.920 is that the reason that almost any business 467 00:15:42.920 --> 00:15:44.080 can be taken to a billion dollars 468 00:15:44.080 --> 00:15:45.400 with a long enough time horizon. 469 00:15:45.400 --> 00:15:46.680 This is truth. 470 00:15:46.680 --> 00:15:49.160 Almost any business can get to a billion dollars 471 00:15:49.160 --> 00:15:51.680 in terms of value with a long enough time horizon. 472 00:15:51.680 --> 00:15:53.200 So you're in the roofing space. 473 00:15:53.200 --> 00:15:54.920 You can get to a billion dollar roofing company. 474 00:15:54.920 --> 00:15:56.080 You have a restaurant. 475 00:15:56.080 --> 00:15:57.440 There's a version of a restaurant business 476 00:15:57.440 --> 00:15:58.280 that is a billion dollars. 477 00:15:58.280 --> 00:15:59.600 It's not a single location, 478 00:15:59.600 --> 00:16:01.720 but it could either be a franchise of a business 479 00:16:01.720 --> 00:16:03.480 where you could have a privately held. 480 00:16:03.480 --> 00:16:05.800 I mean, there's a bunch of big high end change. 481 00:16:05.800 --> 00:16:06.640 You look at masters. 482 00:16:06.640 --> 00:16:07.480 You look at some of these companies. 483 00:16:07.480 --> 00:16:09.840 They're several hundred million dollar companies. 484 00:16:09.840 --> 00:16:11.720 And so you look at dry cleaning. 485 00:16:11.720 --> 00:16:12.720 Like you look at zips. 486 00:16:12.720 --> 00:16:17.200 Like it's a massive, you know, at least domestic in the US, 487 00:16:17.200 --> 00:16:18.640 chain of dry cleaning things. 488 00:16:18.640 --> 00:16:21.200 So like there are versions of every business 489 00:16:21.200 --> 00:16:25.040 that make hundreds of millions, worth billions of dollars. 490 00:16:25.040 --> 00:16:27.200 It's just that it takes a very long time to get there. 491 00:16:27.200 --> 00:16:29.760 And you have to beat new bosses at every level. 492 00:16:29.760 --> 00:16:32.120 And what happens is most people get distracted 493 00:16:32.120 --> 00:16:33.560 because they don't know the business they're in. 494 00:16:33.560 --> 00:16:34.600 They encounter a problem. 495 00:16:34.600 --> 00:16:36.360 They think it's the opportunity vehicle. 496 00:16:36.360 --> 00:16:37.680 They think they need to switch women. 497 00:16:37.680 --> 00:16:40.360 They think they need to go after them in the red dress. 498 00:16:40.360 --> 00:16:42.240 But the reality is that like you just have to have 499 00:16:42.240 --> 00:16:43.760 that hard conversation with your wife 500 00:16:43.760 --> 00:16:45.680 or your girlfriend or whatever you're with right now 501 00:16:45.680 --> 00:16:47.640 to see if we can get to the next level. 502 00:16:49.640 --> 00:16:54.080 And so if you solve the right problems, 503 00:16:54.080 --> 00:16:55.440 and this is how I think about this, 504 00:16:55.440 --> 00:16:58.080 I imagine that I've got this big concrete wall in front. 505 00:16:58.080 --> 00:17:00.320 This is my imagery for myself that gets me through this 506 00:17:00.320 --> 00:17:02.280 because it sucks, right? 507 00:17:02.280 --> 00:17:04.520 You have these moments where you're like, 508 00:17:04.520 --> 00:17:06.920 okay, I just realized that I'm now in the recruiting 509 00:17:06.920 --> 00:17:08.880 and training business for cleaning 510 00:17:08.880 --> 00:17:10.040 and I am not equipped for this. 511 00:17:10.040 --> 00:17:11.720 This is not what I sign up for. 512 00:17:11.720 --> 00:17:12.640 I didn't know she had a kid. 513 00:17:12.640 --> 00:17:14.760 I didn't know that she has a baby daddy that's in jail 514 00:17:14.760 --> 00:17:16.360 and he comes to these coming out in six weeks. 515 00:17:16.360 --> 00:17:18.720 I didn't know these things were there. 516 00:17:18.720 --> 00:17:20.360 Now, using that example, you might just dip, 517 00:17:20.360 --> 00:17:25.080 but let's imagine a world where you had to stick with it, right? 518 00:17:25.080 --> 00:17:26.840 And so I imagine that I've got this big hairy product, 519 00:17:26.840 --> 00:17:28.920 this big wall of concrete in front of me. 520 00:17:28.920 --> 00:17:31.440 But what I do is, and I had this conversation 521 00:17:31.440 --> 00:17:33.040 with one of our portfolios he is, 522 00:17:33.040 --> 00:17:35.080 I was like, hey, we have to build this new product line out 523 00:17:35.080 --> 00:17:36.440 and he was like, I don't know how to do that. 524 00:17:36.440 --> 00:17:38.840 And I was like, well, here's the good news. 525 00:17:38.840 --> 00:17:40.360 Once we do it, I was like, 526 00:17:40.360 --> 00:17:41.920 it'll increase the enterprise value of this business 527 00:17:41.920 --> 00:17:43.160 by $200 million. 528 00:17:44.160 --> 00:17:46.120 And I was like, is that worth it? 529 00:17:46.160 --> 00:17:47.880 And he was like, well, when you say it like that, 530 00:17:47.880 --> 00:17:50.200 he's like, I mean, I definitely feel a lot more encouraged 531 00:17:50.200 --> 00:17:51.040 to solve the problem. 532 00:17:51.040 --> 00:17:54.000 I was like, right, now, I don't think it's $200 million hard. 533 00:17:54.000 --> 00:17:55.680 I was like, this might be $10 million hard, 534 00:17:55.680 --> 00:17:56.600 but that's a great trade. 535 00:17:56.600 --> 00:17:59.080 If this is $10 million hard to get $200 million enterprise value, 536 00:17:59.080 --> 00:18:00.240 that's a fucking steal. 537 00:18:00.240 --> 00:18:01.560 And so I try to think about it like that. 538 00:18:01.560 --> 00:18:03.560 It's like, okay, I've got this big concrete wall in front of me. 539 00:18:03.560 --> 00:18:05.120 And the thing is, is that when you've got a, 540 00:18:05.120 --> 00:18:07.080 you got a sledgehammer and you just don't know 541 00:18:07.080 --> 00:18:08.440 how thick the wall is. 542 00:18:08.440 --> 00:18:10.600 And so it's like, how many times I'm gonna have to eat hammer it? 543 00:18:10.600 --> 00:18:12.840 I know that there's $200 million on the other side. 544 00:18:12.840 --> 00:18:15.080 I just don't know how far I gotta go. 545 00:18:15.080 --> 00:18:16.720 And I think that's one of the difficulties 546 00:18:16.720 --> 00:18:19.400 in entrepreneurship is the uncertainty that's attached 547 00:18:19.400 --> 00:18:22.880 to the level and duration and intensity of the amount of work 548 00:18:22.880 --> 00:18:25.160 that you have to persist and continue to do 549 00:18:25.160 --> 00:18:26.880 without seeing the light at the end of the tunnel, 550 00:18:26.880 --> 00:18:29.480 without having a crack in the wall that you see a little nugget, 551 00:18:29.480 --> 00:18:31.120 a little shimmer of gold, a little diamond 552 00:18:31.120 --> 00:18:32.400 that starts to peak through the corner. 553 00:18:32.400 --> 00:18:34.600 Like you have to keep swinging at the wall. 554 00:18:34.600 --> 00:18:38.640 And so I think about this as making sure 555 00:18:38.640 --> 00:18:40.400 that I'm simply making progress. 556 00:18:40.480 --> 00:18:43.280 And so there are, I didn't think I was gonna get into this, 557 00:18:43.280 --> 00:18:44.200 but I'm gonna go into it. 558 00:18:44.200 --> 00:18:47.520 So there's two very different types of hard and business. 559 00:18:47.520 --> 00:18:50.240 And there's the good kind of hard and there's the bad kind of hard. 560 00:18:50.240 --> 00:18:51.960 So the good kind of hard, as I see it, 561 00:18:51.960 --> 00:18:55.920 is that you have underlying assumptions 562 00:18:55.920 --> 00:18:58.320 that you believe to be true from a first principles level. 563 00:18:58.320 --> 00:18:59.280 So I'll give you an example. 564 00:18:59.280 --> 00:19:00.480 So let's say I wanna get, 565 00:19:00.480 --> 00:19:03.560 I wanna start running TikTok ads for one of our companies. 566 00:19:03.560 --> 00:19:07.040 We don't have TikTok ads going in that particular business. 567 00:19:07.040 --> 00:19:09.440 And we think that fundamentally, 568 00:19:09.520 --> 00:19:11.040 so this is the principle's perspective. 569 00:19:11.040 --> 00:19:13.960 Are there, let's say, accountants on TikTok? 570 00:19:13.960 --> 00:19:15.720 Yes, I think there are accounts on TikTok. 571 00:19:15.720 --> 00:19:18.520 Okay, is there a way that we can run ads profitably 572 00:19:18.520 --> 00:19:21.400 and get our messaging in front of those people on TikTok? 573 00:19:21.400 --> 00:19:22.560 If the answer is yes, 574 00:19:22.560 --> 00:19:24.480 then I fundamentally believe that there's a profitable way 575 00:19:24.480 --> 00:19:27.760 that we can turn those eyeballs into customers, period. 576 00:19:27.760 --> 00:19:29.920 Now, if we start running ads on TikTok 577 00:19:29.920 --> 00:19:31.960 and then we don't immediately make ROI, 578 00:19:31.960 --> 00:19:33.400 that's the good kind of hard. 579 00:19:33.400 --> 00:19:35.800 That's the, okay, well, let's start at the beginning. 580 00:19:35.800 --> 00:19:37.800 How did we get enough clicks? 581 00:19:37.800 --> 00:19:39.240 Okay, yes, we got clicks. 582 00:19:39.240 --> 00:19:40.720 All right, did we get opt-ins? 583 00:19:40.720 --> 00:19:41.720 Yes, we got opt-ins. 584 00:19:41.720 --> 00:19:43.440 Okay, of the opt-ins that we got, 585 00:19:43.440 --> 00:19:45.000 are they the right type of people? 586 00:19:45.000 --> 00:19:46.240 Yes, they're the right type of people, 587 00:19:46.240 --> 00:19:47.360 or no, they're not the right type of people. 588 00:19:47.360 --> 00:19:49.240 Okay, well, then maybe we need to change the messaging. 589 00:19:49.240 --> 00:19:50.320 Maybe we need to change the targeting. 590 00:19:50.320 --> 00:19:51.320 Maybe we need to change the lead man. 591 00:19:51.320 --> 00:19:53.200 But these are the iterative types of hard. 592 00:19:53.200 --> 00:19:55.160 This in my opinion is a good type of hard. 593 00:19:55.160 --> 00:19:58.400 I don't see me losing money on the ads as quote losing money. 594 00:19:58.400 --> 00:20:00.400 I see that as me investing in something 595 00:20:00.400 --> 00:20:02.040 that's gonna increase the enterprise value of my company 596 00:20:02.040 --> 00:20:04.000 because I'm gonna get another acquisition channel. 597 00:20:04.000 --> 00:20:06.120 I'm gonna diversify how I get customers. 598 00:20:06.120 --> 00:20:07.480 To me, that's a great return. 599 00:20:07.480 --> 00:20:09.160 It's actually one of those underutilized ways 600 00:20:09.160 --> 00:20:10.000 to think about this. 601 00:20:10.000 --> 00:20:11.760 It's like, okay, if I have a company 602 00:20:11.760 --> 00:20:12.880 that has one way of getting customers, 603 00:20:12.880 --> 00:20:14.640 and I can get a second way of getting customers, 604 00:20:14.640 --> 00:20:17.600 and I diversify risk in terms of my client acquisition, 605 00:20:17.600 --> 00:20:20.480 that meaningfully increases the enterprise value, 606 00:20:20.480 --> 00:20:21.800 even if I had no additional, 607 00:20:21.800 --> 00:20:23.640 even if I had no more profit from doing this. 608 00:20:23.640 --> 00:20:25.760 Now, obviously, if you have another acquisition channel 609 00:20:25.760 --> 00:20:27.440 and you get 50% of your business from that channel, 610 00:20:27.440 --> 00:20:28.800 then it means you double the business 611 00:20:28.800 --> 00:20:30.920 as long as you don't lose the first acquisition channel. 612 00:20:30.920 --> 00:20:33.720 And so by doing that, I get two multipliers on enterprise value. 613 00:20:33.720 --> 00:20:35.880 One is I absolutely make twice as much money, 614 00:20:35.880 --> 00:20:38.240 which is great, but I also decrease the risk associated 615 00:20:38.320 --> 00:20:39.720 with the purchase for an acquireer, 616 00:20:39.720 --> 00:20:42.960 which means that I will also make more money on the exit. 617 00:20:42.960 --> 00:20:46.520 And so, wow, okay, well, if I do this, again, 618 00:20:46.520 --> 00:20:49.280 what's the price tag that I get to describe to this problem? 619 00:20:49.280 --> 00:20:51.640 Well, if I can double, let's say, 620 00:20:51.640 --> 00:20:52.920 the EBITDA business is two million bucks, 621 00:20:52.920 --> 00:20:54.640 and it's trading at five X, okay, fine. 622 00:20:54.640 --> 00:20:55.760 So this is a $10 million business. 623 00:20:55.760 --> 00:20:59.320 If I can add two, and I diversify acquisition streams, 624 00:20:59.320 --> 00:21:02.880 then that might add minimum 10 million in enterprise value, 625 00:21:02.880 --> 00:21:06.360 but realistically, maybe $15 million to enterprise value 626 00:21:06.360 --> 00:21:07.800 by having this one acquisition system. 627 00:21:07.840 --> 00:21:10.880 And so if I lose a hundred grand, 628 00:21:10.880 --> 00:21:14.160 trying to figure out how to run ads profitably on TikTok, 629 00:21:14.160 --> 00:21:15.440 and it takes me six months, 630 00:21:15.440 --> 00:21:16.800 if I reframe the question is, 631 00:21:16.800 --> 00:21:19.640 hey, will you invest $100,000 in week six months 632 00:21:19.640 --> 00:21:20.680 for a $10 million return? 633 00:21:20.680 --> 00:21:21.520 Would I do it? 634 00:21:21.520 --> 00:21:23.480 Fuck yeah, I would do it. 635 00:21:23.480 --> 00:21:25.720 But people don't think that way, they get butt hurt 636 00:21:25.720 --> 00:21:27.080 because they're like, oh, my eyes didn't work. 637 00:21:27.080 --> 00:21:28.840 I don't think TikTok works for us. 638 00:21:28.840 --> 00:21:30.400 I don't think TikTok, I don't think marketing works. 639 00:21:30.400 --> 00:21:32.240 I don't think paid ads work for us. 640 00:21:32.240 --> 00:21:34.280 Come on, get out of here. 641 00:21:34.280 --> 00:21:35.960 So fundamentally, it's saying, 642 00:21:35.960 --> 00:21:39.080 I don't think that if I get on the phone with accountants 643 00:21:39.080 --> 00:21:41.680 and we sell accounting stuff that will make money, 644 00:21:41.680 --> 00:21:43.480 it's preposterous, it's ridiculous, 645 00:21:43.480 --> 00:21:44.640 but people are pussies, 646 00:21:44.640 --> 00:21:45.720 and that's why they don't make money. 647 00:21:45.720 --> 00:21:50.120 Okay, so big, big, big picture here, right? 648 00:21:50.120 --> 00:21:51.760 Is that we get solved, and sorry, 649 00:21:51.760 --> 00:21:54.520 we get paid to solve big problems, 650 00:21:54.520 --> 00:21:58.160 and the bigger the problem, the bigger the payoff. 651 00:21:58.160 --> 00:22:00.560 And so I like to describe one, 652 00:22:00.560 --> 00:22:02.640 how much enterprise value am I going to get 653 00:22:02.640 --> 00:22:04.440 on the other side of this concrete wall? 654 00:22:04.440 --> 00:22:07.120 And that helps pull me through the fact 655 00:22:07.120 --> 00:22:08.560 that I'm going to have to swing this hammer, 656 00:22:08.560 --> 00:22:10.480 and I don't know how many times I'm going to have to swing it. 657 00:22:10.480 --> 00:22:13.040 And as long as I'm solving the right kind of problem, 658 00:22:13.040 --> 00:22:15.120 which is a type of problem that I can reason 659 00:22:15.120 --> 00:22:17.920 to first principles of the idea of, yes, 660 00:22:17.920 --> 00:22:20.640 people who buy my stuff are on this platform, 661 00:22:20.640 --> 00:22:22.160 and there is a way to reach them, 662 00:22:22.160 --> 00:22:25.560 and I can do so profitably, then we will make money. 663 00:22:25.560 --> 00:22:28.520 Now, you're like, well, what's the bad type of problem? 664 00:22:28.520 --> 00:22:30.120 What's the bad type of heart? 665 00:22:30.120 --> 00:22:32.600 So this is a classic problem of do I push or do I pivot? 666 00:22:32.600 --> 00:22:34.080 And this is a classic, you know, 667 00:22:34.080 --> 00:22:36.800 entrepreneur dilemma that we have, right? 668 00:22:36.800 --> 00:22:40.160 And so I have pivoted a number of times in my career, 669 00:22:40.160 --> 00:22:41.920 and I've pushed a hell of a lot more, 670 00:22:41.920 --> 00:22:44.440 but I pivot when my underlying assumptions 671 00:22:44.440 --> 00:22:45.960 are proven incorrect. 672 00:22:45.960 --> 00:22:48.440 And so it's like, if we believe this to be true, 673 00:22:48.440 --> 00:22:50.240 then this is true, and if this is true, 674 00:22:50.240 --> 00:22:51.080 then this is true. 675 00:22:51.080 --> 00:22:54.200 So if, for example, a report came out from TikTok, 676 00:22:54.200 --> 00:22:55.960 and they said, we have banned accountants 677 00:22:55.960 --> 00:22:58.680 because we don't want financial people on our platform, 678 00:22:58.680 --> 00:23:02.040 then I would say, no, we don't push here. 679 00:23:02.080 --> 00:23:04.680 Like fundamentally, the assumption that we've based 680 00:23:04.680 --> 00:23:07.120 all of these actions on is not true. 681 00:23:07.120 --> 00:23:09.080 And so we pivot. 682 00:23:09.080 --> 00:23:12.280 And so I like to use that as a very clear litmus test 683 00:23:12.280 --> 00:23:14.080 of when am I being a pussy, 684 00:23:14.080 --> 00:23:15.640 or when am I being intelligent? 685 00:23:15.640 --> 00:23:18.720 And so if I say, before we make this big investment, 686 00:23:18.720 --> 00:23:20.640 these are the assumptions that we believe to be true. 687 00:23:20.640 --> 00:23:22.800 And based on these assumptions, we will continue to 688 00:23:22.800 --> 00:23:27.000 persist, we will continue to iterate until we get what we want. 689 00:23:27.000 --> 00:23:29.000 If one of those assumptions is proven wrong, 690 00:23:29.000 --> 00:23:31.400 and we have data to support that is not true, 691 00:23:31.400 --> 00:23:33.440 then we will change our course of action. 692 00:23:33.440 --> 00:23:35.640 And I will lose whatever investment I had there, 693 00:23:35.640 --> 00:23:36.920 but I don't even see that as losing. 694 00:23:36.920 --> 00:23:40.120 I see that as learning, and we invested to learn data 695 00:23:40.120 --> 00:23:42.360 that no one else knows, because if someone else knew it, 696 00:23:42.360 --> 00:23:44.560 well, they might have had to pay to learn it too. 697 00:23:44.560 --> 00:23:45.400 Great. 698 00:23:45.400 --> 00:23:46.640 And I mean, fundamentally, that's the ignorance 699 00:23:46.640 --> 00:23:48.160 acts of business that we all have to pay for. 700 00:23:48.160 --> 00:23:50.400 So let me give you a real example of a lady 701 00:23:50.400 --> 00:23:53.600 who I talked to yesterday who I actually said, 702 00:23:53.600 --> 00:23:55.800 I think you should pivot, which is tough for me, 703 00:23:55.800 --> 00:23:58.240 because I'm always going to be like, 704 00:23:58.240 --> 00:23:59.240 how hard can we push? 705 00:23:59.240 --> 00:24:00.800 Is there a way that we can get through this? 706 00:24:00.800 --> 00:24:03.440 But it became clear talking to her, 707 00:24:03.440 --> 00:24:04.480 and I'll give you the scenarios 708 00:24:04.480 --> 00:24:05.640 you can understand the difference. 709 00:24:05.640 --> 00:24:10.800 So she was a lady who had a canned cocktail business. 710 00:24:10.800 --> 00:24:12.920 So she'd had premium cocktails. 711 00:24:12.920 --> 00:24:14.120 They were in cans, now you're like, 712 00:24:14.120 --> 00:24:15.960 okay, that's a little bit contradictory, but okay. 713 00:24:15.960 --> 00:24:18.640 So, and the cocktails were 5% ABV, 714 00:24:18.640 --> 00:24:20.440 so they weren't cocktail strength. 715 00:24:20.440 --> 00:24:23.120 But so there's basically like premium fruit juices, 716 00:24:23.120 --> 00:24:25.040 now she wouldn't say this, this is me saying this. 717 00:24:25.040 --> 00:24:27.800 Premium fruit juices with organic ingredients and all that 718 00:24:27.800 --> 00:24:29.960 stuff that were priced premium without a premium brand, 719 00:24:29.960 --> 00:24:33.920 but premium ingredients, and she was having trouble selling them. 720 00:24:33.920 --> 00:24:37.080 Now she was, I think she was doing a million and a half a year, 721 00:24:37.080 --> 00:24:39.920 and she had a thousand different distribution channels, 722 00:24:39.920 --> 00:24:41.200 like a literal, as in like, 723 00:24:41.200 --> 00:24:42.760 thousand different stores were carrying it. 724 00:24:42.760 --> 00:24:46.280 And if you're like, wait a thousand stores, 1.5 million a year, 725 00:24:46.280 --> 00:24:48.040 yes, the sell through it was very low, 726 00:24:48.040 --> 00:24:49.920 which means she was able to just basically front inventory 727 00:24:49.920 --> 00:24:51.800 to those people and they're not really moving it. 728 00:24:51.800 --> 00:24:54.680 And so when I hear that, and I heard that, 729 00:24:54.680 --> 00:24:56.040 I was like, okay, well, what experience 730 00:24:56.040 --> 00:24:57.800 do you have in this world at all? 731 00:24:57.800 --> 00:25:00.760 And she had sold it ginger sterile, but for not a lot of money. 732 00:25:00.760 --> 00:25:03.040 And I was like, okay, well, that's kind of related. 733 00:25:03.040 --> 00:25:06.880 And then she was like, well, I've got Amazon going, 734 00:25:06.880 --> 00:25:10.640 I've got a Shopify store, I have B2B wholesale, 735 00:25:10.640 --> 00:25:13.480 and I have, she had all these different lines of business, 736 00:25:13.480 --> 00:25:16.080 and I was like, well, and she just let all of her staff go. 737 00:25:16.080 --> 00:25:19.520 So it's just her, and it made zero profit, 738 00:25:19.520 --> 00:25:22.840 and she was asking me like, what should I do? 739 00:25:22.840 --> 00:25:25.040 And so, and this was tough for me, 740 00:25:25.040 --> 00:25:26.880 because basically I like to think about, 741 00:25:26.880 --> 00:25:29.320 what's the hypothetical extreme version of this business? 742 00:25:29.320 --> 00:25:31.640 What is the, what is the maximize version of this business? 743 00:25:31.640 --> 00:25:35.080 And so I saw two different paths here for her. 744 00:25:36.080 --> 00:25:39.280 Path one was you, and she said, 745 00:25:39.280 --> 00:25:40.520 I want to build a billion dollar thing, 746 00:25:40.520 --> 00:25:42.920 and I was like, all right, well, I mean, 747 00:25:42.920 --> 00:25:44.120 if you want to build a billion dollar thing, 748 00:25:44.120 --> 00:25:45.560 like that's going to be tough, 749 00:25:45.560 --> 00:25:46.960 because you have no money. 750 00:25:46.960 --> 00:25:50.200 And so you have a thousand distribution channels, 751 00:25:50.200 --> 00:25:53.520 and so what we have to do is either A, 752 00:25:53.520 --> 00:25:56.840 you somehow get a lot of money and get a premium brand 753 00:25:56.880 --> 00:25:59.800 sponsorship, you get somebody who can make the association with you, 754 00:25:59.800 --> 00:26:01.800 and then you use that brand sponsorship, 755 00:26:01.800 --> 00:26:03.920 you use the rock, Logan Paul, whatever, 756 00:26:03.920 --> 00:26:06.120 to leverage into these master distribution bases, 757 00:26:06.120 --> 00:26:08.800 and that person promotes it so that people buy in person. 758 00:26:08.800 --> 00:26:10.800 Now, she was RTD, meaning it was ready to drink. 759 00:26:10.800 --> 00:26:13.480 And so shipping costs made direct to consumer, 760 00:26:13.480 --> 00:26:15.640 for me, not really a viable option. 761 00:26:15.640 --> 00:26:16.680 It's too expensive now. 762 00:26:16.680 --> 00:26:17.520 Are there ways you can do it? 763 00:26:17.520 --> 00:26:18.840 Yes, she was listed on Amazon. 764 00:26:18.840 --> 00:26:21.160 It didn't make a lot of money there, but it was there. 765 00:26:21.160 --> 00:26:22.760 Now, the core thing that I asked her, 766 00:26:22.760 --> 00:26:23.880 and by the way, if you're in this business, 767 00:26:23.880 --> 00:26:25.640 this is the core problem that you have to solve, 768 00:26:25.640 --> 00:26:27.920 is that I said, what percentage of people 769 00:26:27.920 --> 00:26:31.120 who drink your drink for the first time buy it again? 770 00:26:31.120 --> 00:26:32.920 And she didn't have that metric. 771 00:26:32.920 --> 00:26:35.960 If there's ever a fucking important metric in a business 772 00:26:35.960 --> 00:26:37.040 for consumer packaged goods, 773 00:26:37.040 --> 00:26:39.840 is what percentage of people who try the thing do it again? 774 00:26:39.840 --> 00:26:41.920 And then mind you, this is of ideal customers, 775 00:26:41.920 --> 00:26:42.760 it's not everybody. 776 00:26:42.760 --> 00:26:45.160 So if you have a kid's chocolate and you give it to old people, 777 00:26:45.160 --> 00:26:46.600 then they're probably not going to want to buy it again. 778 00:26:46.600 --> 00:26:48.800 But of the ideal avatar, of the ideal customer base 779 00:26:48.800 --> 00:26:51.360 that you have, what percentage of those people buy again? 780 00:26:51.360 --> 00:26:52.360 And she didn't even have that metric. 781 00:26:52.360 --> 00:26:53.560 It's like, well, this is really tough. 782 00:26:53.560 --> 00:26:55.080 Now, she'd never run direct response before. 783 00:26:55.160 --> 00:26:56.440 So I was like, I know there's no way 784 00:26:56.440 --> 00:26:58.520 that she's going to be able to do media. 785 00:26:58.520 --> 00:26:59.440 She didn't like advertising. 786 00:26:59.440 --> 00:27:01.000 I was like, there's no way you're going to win. 787 00:27:01.000 --> 00:27:02.760 Build a billion dollar brand. 788 00:27:02.760 --> 00:27:05.640 When you really have to be in the traffic business 789 00:27:05.640 --> 00:27:08.840 for cocktails, if you're going to go to direct to consumer. 790 00:27:08.840 --> 00:27:10.960 Now, if she was like, I'm a dollar-save club advertiser, 791 00:27:10.960 --> 00:27:12.400 then I'd been like, maybe there's a way 792 00:27:12.400 --> 00:27:13.600 she could figure something like this out, 793 00:27:13.600 --> 00:27:15.080 but that wasn't her skill set. 794 00:27:15.080 --> 00:27:16.760 And so I was like, okay, well, you could do this big, 795 00:27:16.760 --> 00:27:18.760 you knew how to get into distribution bases. 796 00:27:18.760 --> 00:27:20.400 That was her skill because she had the distillery. 797 00:27:20.400 --> 00:27:22.360 So that was the one thing she brought to the table. 798 00:27:22.360 --> 00:27:24.520 But she didn't understand branding at all. 799 00:27:24.520 --> 00:27:26.000 And she didn't know if the product was good 800 00:27:26.000 --> 00:27:27.800 because people didn't keep drinking it. 801 00:27:27.800 --> 00:27:29.520 So now what? 802 00:27:29.520 --> 00:27:30.520 She doesn't have any money. 803 00:27:31.480 --> 00:27:33.800 So either she'd have to raise a ton of money, 804 00:27:33.800 --> 00:27:36.520 which I didn't think made a lot of sense 805 00:27:36.520 --> 00:27:38.000 at the level that she was at, 806 00:27:38.000 --> 00:27:41.080 or the recommendation that I had, as I said, listen, 807 00:27:41.080 --> 00:27:43.480 you're in the UK market. 808 00:27:43.480 --> 00:27:45.480 You need to go from a thousand distribution places 809 00:27:45.480 --> 00:27:47.680 to shrinking all the way down to regional, 810 00:27:47.680 --> 00:27:52.680 and you need to go on foot and talk to each of the local sellers 811 00:27:52.960 --> 00:27:54.960 that sell your product at their liquor stores, 812 00:27:54.960 --> 00:27:56.440 or at their convenience stores. 813 00:27:56.440 --> 00:27:59.320 And you need to stand there and sample, and sample, 814 00:27:59.320 --> 00:28:02.080 and sample, and sample, and tell your story. 815 00:28:02.080 --> 00:28:03.760 And when you do that, you'll make money. 816 00:28:03.760 --> 00:28:05.200 People will buy the product just from you being there. 817 00:28:05.200 --> 00:28:07.360 That's profitable on a day to day basis. 818 00:28:07.360 --> 00:28:09.400 But hopefully you do that a couple times a week 819 00:28:09.400 --> 00:28:10.840 at each store, a couple times a week at each store. 820 00:28:10.840 --> 00:28:11.600 And then all of a sudden, 821 00:28:11.600 --> 00:28:13.080 the sales people hear you saying it, 822 00:28:13.080 --> 00:28:15.280 and then you make sure that they get commissions 823 00:28:15.280 --> 00:28:16.280 when they sell your product. 824 00:28:16.280 --> 00:28:17.120 And then all of a sudden, 825 00:28:17.120 --> 00:28:18.400 they start moving it for you. 826 00:28:18.400 --> 00:28:21.680 Now, all of this relies on the thing actually being good, 827 00:28:21.680 --> 00:28:23.680 that if people drink it, they come back and buy it again. 828 00:28:23.680 --> 00:28:25.800 Because the salesmen can always move the first can, 829 00:28:25.800 --> 00:28:26.840 and they're only gonna really do it 830 00:28:26.840 --> 00:28:27.760 if they think it's good. 831 00:28:27.760 --> 00:28:30.400 And so, because they don't wanna sacrifice their relational capital 832 00:28:30.400 --> 00:28:32.000 with the people that are regulars inside the store. 833 00:28:32.000 --> 00:28:33.920 Like, oh, hey, Sarah, what are you buying this week? 834 00:28:33.920 --> 00:28:36.000 Oh, no, we just got this new cocktail thing. 835 00:28:36.000 --> 00:28:38.160 You should give it a shot, it's pretty good, whatever. 836 00:28:38.160 --> 00:28:41.760 And so, these were the core pieces of which I believe 837 00:28:41.760 --> 00:28:42.520 that she would have to do 838 00:28:42.520 --> 00:28:43.880 if she wanted to make this successful. 839 00:28:43.880 --> 00:28:45.640 And I said now to be clear, 840 00:28:45.640 --> 00:28:47.160 in order for this to work, 841 00:28:47.160 --> 00:28:48.640 one, this thing has to be exceptional 842 00:28:48.640 --> 00:28:51.120 in terms of the taste and people have to keep buying. 843 00:28:51.280 --> 00:28:54.120 First core principle, that has to be true. 844 00:28:54.120 --> 00:28:55.720 Because taking to it's absolute extreme, 845 00:28:55.720 --> 00:28:57.520 all the marketing and branding in the world, 846 00:28:57.520 --> 00:28:59.000 you're simply going to tell everybody 847 00:28:59.000 --> 00:29:00.600 you have a mediocre product, they'll never buy it again. 848 00:29:00.600 --> 00:29:02.680 And so, Jessie, it still tells the story that I like a lot. 849 00:29:02.680 --> 00:29:04.480 He had this product called Sheets. 850 00:29:04.480 --> 00:29:06.720 It was a caffeinated like Listerine strip. 851 00:29:06.720 --> 00:29:08.520 And he partnered with LeBron. 852 00:29:08.520 --> 00:29:10.560 So he had premium brand, like Jessie gets it, 853 00:29:10.560 --> 00:29:13.160 premium brand, big traffic, big distribution. 854 00:29:13.160 --> 00:29:14.800 He already had the connections with distribution. 855 00:29:14.800 --> 00:29:17.320 And he said they started cranking sales first week, 856 00:29:17.320 --> 00:29:19.400 second week, more sales, third week, even more sales, 857 00:29:19.400 --> 00:29:20.400 fourth week, even more sales. 858 00:29:20.880 --> 00:29:22.480 This thing is going to be a billion dollar brand in two years. 859 00:29:22.480 --> 00:29:23.440 This is going to be unbelievable. 860 00:29:23.440 --> 00:29:25.920 Fifth week, sales go down. 861 00:29:25.920 --> 00:29:27.960 Six week, sales go even lower. 862 00:29:27.960 --> 00:29:30.280 Seventh week, sales go even lower. 863 00:29:30.280 --> 00:29:31.080 Why? 864 00:29:31.080 --> 00:29:33.400 And he says this, he's like, the product just wasn't good enough. 865 00:29:33.400 --> 00:29:35.160 And so if you're an expert marketer, 866 00:29:35.160 --> 00:29:37.640 expert brander with consumer package goods, 867 00:29:37.640 --> 00:29:39.880 you can absolutely get that big boom if you do it right. 868 00:29:39.880 --> 00:29:40.880 And she didn't have that skills yet. 869 00:29:40.880 --> 00:29:43.440 And he had money and celebrity endorsements. 870 00:29:43.440 --> 00:29:44.680 She had neither of those things. 871 00:29:44.680 --> 00:29:47.800 But I wasn't even confident that the product was good enough. 872 00:29:47.800 --> 00:29:49.880 If the product was, it would still keep growing 873 00:29:49.880 --> 00:29:51.920 at a slower pace, but it would still keep growing 874 00:29:51.920 --> 00:29:54.840 every month, because people would come back to buy it. 875 00:29:54.840 --> 00:29:58.320 So for her, I said, you have to compress this all the way down. 876 00:29:58.320 --> 00:30:01.960 And then this might take 10 to 15 years. 877 00:30:01.960 --> 00:30:03.400 And if you're willing to do that, 878 00:30:03.400 --> 00:30:04.800 and she had come into this being like, 879 00:30:04.800 --> 00:30:06.840 this is the market trends, blah, blah, blah, blah. 880 00:30:06.840 --> 00:30:09.720 But what I didn't sense was what I call missionary heart. 881 00:30:09.720 --> 00:30:11.360 Now, there's mercenaries who are like, 882 00:30:11.360 --> 00:30:12.800 look at the arbitrage, look at the charts, 883 00:30:12.800 --> 00:30:14.120 look at bubble, like this is the opportunity 884 00:30:14.120 --> 00:30:15.280 that I could tap into. 885 00:30:15.280 --> 00:30:17.880 It was like, yeah, but no one's buying your stuff. 886 00:30:17.920 --> 00:30:20.160 And if she had said, there's a hole in my heart, 887 00:30:20.160 --> 00:30:21.680 and I want this drink to be in the world, 888 00:30:21.680 --> 00:30:23.840 because it changed my life, then I'd be like, awesome. 889 00:30:23.840 --> 00:30:25.080 Then like, let's make it happen. 890 00:30:25.080 --> 00:30:27.040 And you're going to be willing to pick 15 years, 891 00:30:27.040 --> 00:30:29.520 because it's your soul, it's your passion, 892 00:30:29.520 --> 00:30:30.840 it's something that you feel like you're put on this earth 893 00:30:30.840 --> 00:30:31.680 to do. 894 00:30:31.680 --> 00:30:33.320 I didn't get that vibe from her. 895 00:30:33.320 --> 00:30:36.080 And so seeing that she wanted to have this big billion dollar 896 00:30:36.080 --> 00:30:38.480 thing, and seeing that she didn't have the heart for it, 897 00:30:38.480 --> 00:30:41.360 and knowing that the big brand play was probably off the table, 898 00:30:41.360 --> 00:30:42.960 because she didn't have the money for it, 899 00:30:42.960 --> 00:30:47.800 I told her, I said, okay, I'll give you one Hail Mary, 900 00:30:48.320 --> 00:30:50.360 and if this Hail Mary doesn't work, 901 00:30:50.360 --> 00:30:53.200 you shut down the business and you move on. 902 00:30:53.200 --> 00:30:56.720 And so the Hail Mary was, the canned size was small, 903 00:30:56.720 --> 00:31:00.240 and it fit well for airport people, 904 00:31:00.240 --> 00:31:01.200 like the airport, she says, 905 00:31:01.200 --> 00:31:03.800 airplane, stewardesses, and training, and bus, 906 00:31:03.800 --> 00:31:06.480 people, they have these carts with little short trays. 907 00:31:06.480 --> 00:31:08.240 And so she's like, I'm in talks with them, 908 00:31:08.240 --> 00:31:09.080 and they're very interested, 909 00:31:09.080 --> 00:31:11.480 because the size is actually right for them. 910 00:31:11.480 --> 00:31:16.160 And so I said, okay, well, if you can go close a cruise liner 911 00:31:16.160 --> 00:31:19.560 that has 90 cruise ships, and you can make them your distribution, 912 00:31:19.560 --> 00:31:21.200 maybe you're selling the wrong market, 913 00:31:21.200 --> 00:31:25.000 maybe instead of selling to brick and mortar distributors, 914 00:31:25.000 --> 00:31:28.200 you actually just need to go to transportation-based businesses. 915 00:31:28.200 --> 00:31:29.680 And then that's your niche. 916 00:31:29.680 --> 00:31:30.800 And the thing is, is there, 917 00:31:30.800 --> 00:31:32.360 you only have to outcompete like two or three other people, 918 00:31:32.360 --> 00:31:34.160 because it's super narrow. 919 00:31:34.160 --> 00:31:37.280 Now, they're gonna have very strict requirements of the canned size, 920 00:31:37.280 --> 00:31:39.200 the weight, the packaging, the labeling, 921 00:31:39.200 --> 00:31:41.080 the price points, which is gonna be a problem for her, 922 00:31:41.080 --> 00:31:42.800 because she's premium and known cares. 923 00:31:43.760 --> 00:31:45.400 But if you sell into that, and I said, 924 00:31:45.400 --> 00:31:48.160 go there, big barons steal and do whatever you can to get that contract. 925 00:31:48.160 --> 00:31:50.440 If you can't close one of these big contracts, 926 00:31:50.440 --> 00:31:52.640 that'll give you the cash within to expand from there, 927 00:31:52.640 --> 00:31:55.040 and that you can leverage, like, hey, I just got into Carnival. 928 00:31:55.040 --> 00:31:57.000 Hey, Royal Cruise Line, do you guys wanna get it too? 929 00:31:57.000 --> 00:31:58.520 Because you can leverage that one sale, 930 00:31:58.520 --> 00:32:01.080 that gives you all the credibility to get the rest of your meetings. 931 00:32:01.080 --> 00:32:03.880 But if you can't close that deal, for me, I said, 932 00:32:03.880 --> 00:32:06.040 I think she pivot, because I didn't think, 933 00:32:06.040 --> 00:32:08.320 if I were betting, I wouldn't have been on the business. 934 00:32:08.320 --> 00:32:11.520 And I try to serve the entrepreneur above everything else. 935 00:32:11.520 --> 00:32:13.720 And given the skills that she had coming into it, 936 00:32:13.720 --> 00:32:17.120 that wouldn't have been the bet that I would have taken. 937 00:32:17.120 --> 00:32:20.880 And so I say that as the counter example of, 938 00:32:20.880 --> 00:32:22.920 there were fundamentals that would have to be true 939 00:32:22.920 --> 00:32:24.040 in order for her to win here. 940 00:32:24.040 --> 00:32:26.040 She would have to have a lot of money to do the big brand deal, 941 00:32:26.040 --> 00:32:27.360 and have distribution. 942 00:32:27.360 --> 00:32:29.080 She would have to be super passionate, 943 00:32:29.080 --> 00:32:30.720 and have a 10 to 15 year time horizon, 944 00:32:30.720 --> 00:32:34.600 to make the regional, super small play work hand-to-hand combat. 945 00:32:34.600 --> 00:32:35.520 She would have to have that. 946 00:32:35.520 --> 00:32:36.760 She didn't have either of those things. 947 00:32:36.760 --> 00:32:39.360 And so the only real viable path that required no money, 948 00:32:39.360 --> 00:32:40.880 that had the existing skills that she had, 949 00:32:40.880 --> 00:32:42.760 was go to transportation distribution, 950 00:32:42.760 --> 00:32:44.760 and use the fact that she had this kind of unique aspect 951 00:32:44.760 --> 00:32:47.160 to the size of the cans, and have that be the selling point. 952 00:32:47.160 --> 00:32:49.600 And hope to God that that actually works, 953 00:32:49.600 --> 00:32:52.400 because if that didn't work, she would run out of money 954 00:32:52.400 --> 00:32:54.840 before anything else would happen. 955 00:32:54.840 --> 00:32:56.960 And then she would be forced to change the business. 956 00:32:56.960 --> 00:32:59.240 And I would rather her learn that quickly 957 00:32:59.240 --> 00:33:00.800 than waste another three years, 958 00:33:00.800 --> 00:33:03.160 not making progress on potentially a different business 959 00:33:03.160 --> 00:33:05.600 that would be better suited for her skill set. 960 00:33:05.600 --> 00:33:08.200 And what made this particular woman really interesting, 961 00:33:08.200 --> 00:33:10.440 is I said, like, how do you live? 962 00:33:10.440 --> 00:33:12.200 Because I asked pretty point-plaint questions. 963 00:33:12.440 --> 00:33:13.960 She looked like she had nice clothing. 964 00:33:13.960 --> 00:33:15.960 She looked like she lived nicely. 965 00:33:15.960 --> 00:33:17.960 And so she said she sold a gym business. 966 00:33:17.960 --> 00:33:20.400 So I said, gym, as in alcohol, not gym. 967 00:33:21.320 --> 00:33:23.760 And she said, oh, well, that actually didn't make 968 00:33:23.760 --> 00:33:24.720 a ton of money on that sale. 969 00:33:24.720 --> 00:33:26.040 And I was like, well, where did your money come from? 970 00:33:26.040 --> 00:33:28.120 And she said, oh, property development. 971 00:33:28.120 --> 00:33:29.920 And I was like, wait, what? 972 00:33:29.920 --> 00:33:31.600 And she's like, yeah, I developed pen houses. 973 00:33:31.600 --> 00:33:34.080 And I was like, wait, so you have this cocktail business, 974 00:33:34.080 --> 00:33:35.640 but you also have this property development business. 975 00:33:35.640 --> 00:33:37.560 She was like, oh, well, I've been doing that my whole life. 976 00:33:37.560 --> 00:33:39.240 It's just on the side, it kind of runs itself. 977 00:33:39.240 --> 00:33:40.080 It's very easy. 978 00:33:40.080 --> 00:33:41.160 And I was like, okay. 979 00:33:41.200 --> 00:33:43.320 So let me tell you a little less than I've learned in my life 980 00:33:43.320 --> 00:33:44.400 from being an entrepreneur. 981 00:33:45.680 --> 00:33:49.000 When money comes easy, I go hard. 982 00:33:49.000 --> 00:33:51.920 When money comes hard, I go easy. 983 00:33:51.920 --> 00:33:56.480 And so so many of the businesses I have are half steps 984 00:33:56.480 --> 00:33:58.200 where it's like I thought I was gonna get here 985 00:33:58.200 --> 00:34:00.600 and then boom, this flow of cash opens up. 986 00:34:00.600 --> 00:34:03.000 I was like, oh, maybe this is the business 987 00:34:03.000 --> 00:34:04.200 I should be getting into. 988 00:34:04.200 --> 00:34:05.880 Like, gym launch started by accident. 989 00:34:05.880 --> 00:34:07.280 I was doing turn-arounds, flying out, 990 00:34:07.280 --> 00:34:08.400 doing done-for-you-sales. 991 00:34:08.400 --> 00:34:10.560 And only because I was like, hey, I'm gonna shift my business 992 00:34:10.560 --> 00:34:12.680 over to just selling direct to consumer 993 00:34:12.680 --> 00:34:14.200 that I said, hey, I'll sell the licensing 994 00:34:14.200 --> 00:34:15.440 of all the stuff that I used to use. 995 00:34:15.440 --> 00:34:16.720 That I made more money in a month 996 00:34:16.720 --> 00:34:17.720 than I ever made in my life. 997 00:34:17.720 --> 00:34:21.520 And I was like, whoa, maybe this is the business I'm in. 998 00:34:21.520 --> 00:34:23.360 And there's so many happy coincidence. 999 00:34:23.360 --> 00:34:24.680 There was another business owner that was there 1000 00:34:24.680 --> 00:34:26.920 that had an agency business. 1001 00:34:26.920 --> 00:34:29.160 And so many of his customers needed financing 1002 00:34:29.160 --> 00:34:30.560 because he had a really high end thing. 1003 00:34:30.560 --> 00:34:34.720 And so he was selling like $50,000 or like very done-for-you-turnkey 1004 00:34:34.720 --> 00:34:37.360 website buildouts, ads, whatever. 1005 00:34:37.400 --> 00:34:41.760 And he realized that he was so good at getting people financing 1006 00:34:41.760 --> 00:34:43.400 that he was making more money on the financing 1007 00:34:43.400 --> 00:34:45.480 than he was on the actual agency services. 1008 00:34:45.480 --> 00:34:47.120 And so he stopped doing agency services 1009 00:34:47.120 --> 00:34:48.880 and just got into debt financing for businesses. 1010 00:34:48.880 --> 00:34:50.440 So he just got into credit loans and, 1011 00:34:50.440 --> 00:34:53.520 sorry, business lines and getting business debt. 1012 00:34:53.520 --> 00:34:55.920 And so like, it's amazing how these things, 1013 00:34:55.920 --> 00:34:57.160 how these stories come to be. 1014 00:34:57.160 --> 00:34:58.560 It's like, you just gotta have the notes for the money. 1015 00:34:58.560 --> 00:35:01.160 And so she was here saying that she had a prop, 1016 00:35:01.160 --> 00:35:02.720 and I was like, so, hold on. 1017 00:35:02.720 --> 00:35:03.880 You've made all the money in your life 1018 00:35:03.880 --> 00:35:05.160 from property development. 1019 00:35:05.160 --> 00:35:07.960 And you basically play business on the side. 1020 00:35:08.920 --> 00:35:12.520 So you easily, in a couple hours' week, make more money 1021 00:35:12.520 --> 00:35:13.760 than you make with all your hours' week 1022 00:35:13.760 --> 00:35:14.840 on this other business. 1023 00:35:14.840 --> 00:35:15.920 She was like, yeah. 1024 00:35:15.920 --> 00:35:18.040 I was like, well then why don't you just do all of your time 1025 00:35:18.040 --> 00:35:19.960 on the thing that makes you the most money? 1026 00:35:19.960 --> 00:35:22.560 And she said, I swear to God, this is what she said. 1027 00:35:22.560 --> 00:35:25.600 She said, that business isn't scalable. 1028 00:35:25.600 --> 00:35:27.040 And I was like, okay. 1029 00:35:27.040 --> 00:35:30.520 I want you to say that to me again, really slowly. 1030 00:35:30.520 --> 00:35:33.720 Property development isn't scalable. 1031 00:35:33.720 --> 00:35:35.520 I was like, so you're telling me 1032 00:35:35.520 --> 00:35:39.840 that developing real estate is not a scalable business. 1033 00:35:39.840 --> 00:35:41.720 I was like, do you know how many billionaires 1034 00:35:41.720 --> 00:35:43.880 and 100 millionaires and Decker millionaires 1035 00:35:43.880 --> 00:35:46.280 made all their money developing property? 1036 00:35:46.280 --> 00:35:48.360 It's literally the most scalable business. 1037 00:35:48.360 --> 00:35:50.640 You add zeros and you develop a bigger property. 1038 00:35:50.640 --> 00:35:51.480 That is how you do it. 1039 00:35:51.480 --> 00:35:52.320 That is how you scale it. 1040 00:35:52.320 --> 00:35:54.000 Now, you're gonna have to hire employees. 1041 00:35:54.000 --> 00:35:54.840 But guess what? 1042 00:35:54.840 --> 00:35:55.880 You already know how to do it. 1043 00:35:55.880 --> 00:35:57.120 Whereas in the other business that you're in, 1044 00:35:57.120 --> 00:35:58.760 you don't know anything about the business. 1045 00:35:58.760 --> 00:36:00.680 This business you've been doing your whole life. 1046 00:36:00.680 --> 00:36:03.520 And so you already know how you negotiate these loans. 1047 00:36:03.520 --> 00:36:05.440 How you negotiate the properties 1048 00:36:05.440 --> 00:36:07.120 and what markets you look after 1049 00:36:07.120 --> 00:36:08.400 and where you see the arbitration. 1050 00:36:08.400 --> 00:36:09.440 How you do the redecorations 1051 00:36:09.440 --> 00:36:10.760 and who your interior designers are. 1052 00:36:10.760 --> 00:36:12.360 You already have all the connections. 1053 00:36:12.360 --> 00:36:13.400 You just need to hire people. 1054 00:36:13.400 --> 00:36:14.920 And so the real problem was that she just didn't know 1055 00:36:14.920 --> 00:36:15.760 how to manage. 1056 00:36:15.760 --> 00:36:16.600 People should not train people. 1057 00:36:16.600 --> 00:36:18.600 And that was then the real problem 1058 00:36:18.600 --> 00:36:20.560 that honestly spread across all the businesses 1059 00:36:20.560 --> 00:36:21.920 that she was trying to deal with. 1060 00:36:21.920 --> 00:36:24.080 But we tell ourselves these stories. 1061 00:36:24.080 --> 00:36:26.640 And it's so interesting the stories that limit us 1062 00:36:26.640 --> 00:36:28.680 because anybody from the outside 1063 00:36:28.680 --> 00:36:29.640 would be like, wait a second. 1064 00:36:29.640 --> 00:36:32.200 So you make all this money really easily 1065 00:36:32.200 --> 00:36:34.280 on this thing that has clear scale 1066 00:36:34.280 --> 00:36:35.800 that is a tried and true business 1067 00:36:35.800 --> 00:36:39.040 that has existed for thousands of years, real estate. 1068 00:36:40.000 --> 00:36:42.400 Or you have this thing that you have to have tons of capital. 1069 00:36:42.400 --> 00:36:44.120 You have no experience and you don't have market. 1070 00:36:44.120 --> 00:36:45.360 You don't know how to advertise. 1071 00:36:45.360 --> 00:36:46.520 You don't know how to brand. 1072 00:36:46.520 --> 00:36:48.240 You don't know media. 1073 00:36:48.240 --> 00:36:50.600 And you don't want to go face to face, hand to hand 1074 00:36:50.600 --> 00:36:53.560 and do knock on a hundred doors and do that. 1075 00:36:53.560 --> 00:36:56.080 Well, maybe we do more of the thing 1076 00:36:56.080 --> 00:36:56.720 that you're really good at 1077 00:36:56.720 --> 00:36:57.880 that you have all the experience of. 1078 00:36:57.880 --> 00:36:59.840 And then we confront the problem 1079 00:36:59.840 --> 00:37:01.040 that you didn't want to confront. 1080 00:37:01.040 --> 00:37:02.760 The big hairy thing which was she didn't know 1081 00:37:02.760 --> 00:37:03.920 how to scale that business. 1082 00:37:03.920 --> 00:37:05.320 And I said, so what I want you to do 1083 00:37:05.320 --> 00:37:07.480 is that I'm saying this isn't scalable. 1084 00:37:07.480 --> 00:37:10.200 I want you to say, I don't know how to scale this. 1085 00:37:11.160 --> 00:37:14.160 And that becomes a problem that you consult. 1086 00:37:14.160 --> 00:37:16.320 It's the same as saying, there's no salespeople 1087 00:37:16.320 --> 00:37:17.160 who sell like me. 1088 00:37:17.160 --> 00:37:20.160 No, you don't know how to get salespeople to sell like you. 1089 00:37:20.160 --> 00:37:22.440 There's no marketing doesn't work for my business. 1090 00:37:22.440 --> 00:37:25.040 No, I don't know how to make marketing work for my business. 1091 00:37:25.040 --> 00:37:26.960 You go from it being a circumstance, 1092 00:37:26.960 --> 00:37:29.640 universe problem to something that you can control 1093 00:37:29.640 --> 00:37:30.720 and you take the sledgehammer, 1094 00:37:30.720 --> 00:37:32.200 you confront the big concrete wall, 1095 00:37:32.200 --> 00:37:33.960 you realize the payout that you have on the other side 1096 00:37:33.960 --> 00:37:36.200 and you ask yourself, if I had a business 1097 00:37:36.200 --> 00:37:37.720 that was a property development business 1098 00:37:37.720 --> 00:37:41.480 and I could scale it, how much would that be worth to me? 1099 00:37:41.480 --> 00:37:44.120 And am I willing to do the work to get it? 1100 00:37:44.120 --> 00:37:46.280 And if the answer's yes, then you get to work. 1101 00:37:46.280 --> 00:37:48.840 And so if we look at this entrepreneur, 1102 00:37:48.840 --> 00:37:51.920 the cocktail lady who had the property development business, 1103 00:37:51.920 --> 00:37:55.280 she actually was in the right business 1104 00:37:55.280 --> 00:37:56.680 in her property development. 1105 00:37:56.680 --> 00:37:59.440 And rather than push, she pivoted. 1106 00:37:59.480 --> 00:38:01.480 She got seduced by the woman in the red dress. 1107 00:38:01.480 --> 00:38:02.680 She got seduced by the lady who said, 1108 00:38:02.680 --> 00:38:05.920 hey, your skill set would be so much cooler over here. 1109 00:38:05.920 --> 00:38:07.680 You'd be able to build a billion dollar thing 1110 00:38:07.680 --> 00:38:09.440 faster over here. 1111 00:38:09.440 --> 00:38:10.480 Hey, if you guys are enjoying this 1112 00:38:10.480 --> 00:38:12.880 and this may be changed the way that you see your business 1113 00:38:12.880 --> 00:38:14.880 or you think that would affect another business owner 1114 00:38:14.880 --> 00:38:16.640 or an employee in another business, 1115 00:38:16.640 --> 00:38:18.000 it would be the world to me if you shared it. 1116 00:38:18.000 --> 00:38:19.960 And if you want to tag me on Instagram, 1117 00:38:19.960 --> 00:38:21.280 just tag me with a little easter egg 1118 00:38:21.280 --> 00:38:23.960 of a right kind of hard, winky face. 1119 00:38:23.960 --> 00:38:25.760 I'll just leave it like that. 1120 00:38:25.760 --> 00:38:28.040 Me and the world and enjoy the rest of the show. 1121 00:38:28.040 --> 00:38:32.640 But she could and probably needed to simply push through 1122 00:38:32.640 --> 00:38:34.960 the existing business that had fundamental truths 1123 00:38:34.960 --> 00:38:36.640 that she could not, you can't disprove. 1124 00:38:36.640 --> 00:38:39.720 Like, whenever someone says this business isn't scalable, 1125 00:38:39.720 --> 00:38:41.600 you have to break it down to physics. 1126 00:38:41.600 --> 00:38:44.560 Tell me why physically it's impossible 1127 00:38:44.560 --> 00:38:45.960 to scale property development. 1128 00:38:45.960 --> 00:38:49.080 Are there not enough property to develop? 1129 00:38:49.080 --> 00:38:51.720 Why is it not scalable? 1130 00:38:51.720 --> 00:38:54.240 Because entrepreneurs throw this thing all the time. 1131 00:38:54.240 --> 00:38:56.280 They're like, that business isn't scalable. 1132 00:38:56.280 --> 00:38:57.640 Why? 1133 00:38:57.640 --> 00:38:59.080 It just means you don't know how to scale it 1134 00:38:59.080 --> 00:39:00.200 or it's difficult to scale. 1135 00:39:00.200 --> 00:39:01.040 Well, guess what? 1136 00:39:01.040 --> 00:39:03.680 There's also a big payoff for once you solve it. 1137 00:39:03.680 --> 00:39:06.120 And so usually people progress through the easier problems 1138 00:39:06.120 --> 00:39:07.840 they know how to solve and then they stop 1139 00:39:07.840 --> 00:39:09.400 when it's a problem they've never seen before. 1140 00:39:09.400 --> 00:39:11.960 And then they try and come up with all sorts of crazy ideas 1141 00:39:11.960 --> 00:39:14.120 that justify why they shouldn't keep pursuing 1142 00:39:14.120 --> 00:39:16.080 or they shouldn't keep failing. 1143 00:39:16.080 --> 00:39:19.680 And when I say failing, I mean, trial and failing, 1144 00:39:19.680 --> 00:39:22.200 trial and erroring, they don't want to keep 1145 00:39:22.200 --> 00:39:24.320 erroring on the thing they're in 1146 00:39:24.320 --> 00:39:26.080 and they just want to feel like they win again. 1147 00:39:26.080 --> 00:39:27.160 And that's why they move. 1148 00:39:27.160 --> 00:39:29.280 They move because they know how to win in this other thing. 1149 00:39:29.280 --> 00:39:31.160 And so they go for the quick win 1150 00:39:31.160 --> 00:39:33.960 rather than the long win, which is you get 1151 00:39:33.960 --> 00:39:35.560 through getting punched in the face over and over again 1152 00:39:35.560 --> 00:39:37.080 and sledge them in your way through the wall 1153 00:39:37.080 --> 00:39:38.600 that you don't know how thick it is. 1154 00:39:38.600 --> 00:39:40.040 And for that specific entrepreneur 1155 00:39:40.040 --> 00:39:42.160 because I did talk to you and you might listen to this. 1156 00:39:42.160 --> 00:39:44.720 If you really believe in this cocktail thing, 1157 00:39:44.720 --> 00:39:48.320 then you got to go go for broke on this contract 1158 00:39:48.320 --> 00:39:49.680 that you get for the transportation. 1159 00:39:49.680 --> 00:39:51.920 Like there is, it's a zero fail situation. 1160 00:39:51.920 --> 00:39:54.200 Like if you want to make this business work, 1161 00:39:54.200 --> 00:39:55.560 that is your zero fail situation. 1162 00:39:55.680 --> 00:39:56.920 It's the only thing that's going to get you 1163 00:39:56.920 --> 00:39:58.960 a lot of money for no capital down 1164 00:39:58.960 --> 00:40:00.240 that'll get you immediate distribution 1165 00:40:00.240 --> 00:40:02.920 despite the fact that you don't have like a big good brand. 1166 00:40:02.920 --> 00:40:05.280 If you can just do that, that becomes your niche 1167 00:40:05.280 --> 00:40:06.760 and then you try and own as much of that market 1168 00:40:06.760 --> 00:40:07.880 as humanly possible. 1169 00:40:07.880 --> 00:40:11.320 If you can't or you don't succeed, 1170 00:40:11.320 --> 00:40:15.160 this is where the heart is where like if you heart, 1171 00:40:15.160 --> 00:40:17.040 if you really wanted this thing to come to life, 1172 00:40:17.040 --> 00:40:19.360 then you would go back and you'd start working local 1173 00:40:19.360 --> 00:40:21.040 and you'd go store to store and you'd say 1174 00:40:21.040 --> 00:40:23.280 I'm going to commit the next 15 years to this. 1175 00:40:23.280 --> 00:40:25.520 And that's if the product is good enough. 1176 00:40:25.520 --> 00:40:27.840 If it's not good enough and people don't keep buying it, 1177 00:40:27.840 --> 00:40:31.120 all of this will be for nothing, truly. 1178 00:40:31.120 --> 00:40:32.120 Like it will be for nothing 1179 00:40:32.120 --> 00:40:34.160 because fundamentally the product has to be good enough 1180 00:40:34.160 --> 00:40:35.360 that people want to buy again. 1181 00:40:35.360 --> 00:40:37.040 Otherwise, you spend all the money to a car customer 1182 00:40:37.040 --> 00:40:37.880 and they drink it once. 1183 00:40:37.880 --> 00:40:39.480 There's no LTV and consumer package goods 1184 00:40:39.480 --> 00:40:40.960 unless people get repurchases. 1185 00:40:40.960 --> 00:40:41.800 That's it. 1186 00:40:41.800 --> 00:40:43.000 It has to get repused purchases 1187 00:40:43.000 --> 00:40:45.480 without you telling them to buy it. 1188 00:40:45.480 --> 00:40:47.200 And so if that's the big principle, 1189 00:40:47.200 --> 00:40:48.520 like what's the foundational principle 1190 00:40:48.520 --> 00:40:50.120 that we prove to be untrue, 1191 00:40:50.120 --> 00:40:51.880 you'd either have to change the product 1192 00:40:53.280 --> 00:40:54.320 or change the business. 1193 00:40:54.320 --> 00:40:56.440 I hope that this encouraged some of you guys to push through 1194 00:40:56.440 --> 00:40:58.120 and maybe some of you to pivot 1195 00:40:58.120 --> 00:41:01.160 if what you believe to be true no longer is 1196 00:41:01.160 --> 00:41:04.800 and to waste less of the thing that matters most, 1197 00:41:04.800 --> 00:41:05.680 which is your life, 1198 00:41:05.680 --> 00:41:07.160 more than the money that you might have lost 1199 00:41:07.160 --> 00:41:08.880 in the meantime by making the pivot.