WEBVTT 1 00:00:00.000 --> 00:00:07.680 So I lost a lot of money, a lot of money, a lot of money, and a lot of brain power when I got in 2 00:00:07.680 --> 00:00:13.200 bed with a very bad partner. So I'm going to tell you what I did and what I did wrong. So bad partners. 3 00:00:13.200 --> 00:00:18.400 Now I had partners before and they were good partners. We had bad partnerships. This is bad partner. 4 00:00:18.400 --> 00:00:22.080 So I want to be really clear about the difference. All the partners I had before, ethical, 5 00:00:22.080 --> 00:00:26.080 find people, nothing wrong with it. We had a bad structure. And so you have the person and you also 6 00:00:26.080 --> 00:00:29.840 have the structure of the relationship that both have to be aligned. And as a side note, if you 7 00:00:29.840 --> 00:00:34.080 are dealing with somebody that you like, but you can't agree on a structure, it means don't do it. 8 00:00:34.080 --> 00:00:37.440 And the hard part is a lot of people get to that point where they're like, well, let's just make 9 00:00:37.440 --> 00:00:42.000 it work. Are you trying to concede? That will be a problem later. I promise you. And so like, 10 00:00:42.560 --> 00:00:45.920 if you're going to be making decisions together as co-owners of a business and you can't agree on 11 00:00:45.920 --> 00:00:51.280 the structure, that's a great sign. And the thing is, it's okay to not agree. The amount of deals that 12 00:00:51.280 --> 00:00:56.480 I've negotiated and gotten to the enemy like, oh, we just value things differently. That's fine. 13 00:00:57.120 --> 00:01:00.720 You only want to get into bed with somebody who values your contribution the same way you do and 14 00:01:00.720 --> 00:01:04.480 you value their contribution the same way they do. Like you have to have alignment there. If you don't, 15 00:01:04.480 --> 00:01:09.120 you're going to be at the offset misaligned and it's just going to be trouble. Now, this is bad 16 00:01:09.120 --> 00:01:12.880 partners. All right. It's a bad partners. I'll define as people who have nefarious intentions 17 00:01:12.880 --> 00:01:16.640 who actually want to hurt you. There's a difference there between somebody who wants to win. And 18 00:01:16.640 --> 00:01:20.240 it's just about how much of the pie they want to get, which is completely self-serving and fine. 19 00:01:20.240 --> 00:01:23.280 Like there's nothing wrong with that. It's America. It's capitalism. Everybody wants to have more 20 00:01:23.280 --> 00:01:29.280 of the pie. That partners want to take your pie and do so in a way that's deceitful. So, 21 00:01:29.280 --> 00:01:33.280 some of you as I have heard my story, this was actually the last partner that I took on. So, 22 00:01:33.280 --> 00:01:37.280 this was punishing enough that it was traumatizing. It permanently changed my behavior. All right. 23 00:01:37.280 --> 00:01:44.080 And so I had just sold. So I had six locations at this time with my gyms. I had bought out some of 24 00:01:44.080 --> 00:01:47.920 my past partners, which cost me a lot of money, costing me more money than it cost me to sell 25 00:01:47.920 --> 00:01:51.440 to have them buy in. All right. So I had to pay that money to those guys over time so I could buy 26 00:01:51.440 --> 00:01:56.720 them out. And so I had six locations. Now, I shut down one because it was too new and I decided 27 00:01:56.720 --> 00:02:01.200 to switch gears because I wanted to start the licensing business. And I sold five. Now, for a 28 00:02:01.200 --> 00:02:04.800 separate story, I sold each of the five different people. I sold two employees. I sold the customers. 29 00:02:04.800 --> 00:02:09.200 I sold to a competitor. And so I sold all these different locations, different people. And I did 30 00:02:09.200 --> 00:02:13.920 cash deals, seller finance deals. I did debt deals. So I actually got a ton of M&A experience 31 00:02:13.920 --> 00:02:18.320 really early on from selling to different types of buyers and doing different types of deal structures, 32 00:02:18.320 --> 00:02:22.960 which will be a conversation at that time. But now I had big pile of money, big being relative. 33 00:02:22.960 --> 00:02:27.280 I had some money that I got from the years of me growing the gyms. And so at this point, 34 00:02:27.280 --> 00:02:31.200 this is now like basically my egg. What I have to show for it, for all this work and all the 35 00:02:31.200 --> 00:02:35.360 sacrifice they've done at this point, I've got this, this stick. Now, I was doing gym launches at 36 00:02:35.360 --> 00:02:39.280 the time. So this is why I made the transition. I started flying out to gyms, I started making money. 37 00:02:39.280 --> 00:02:44.480 And I could do like $100,000 in sales in about three weeks. And I would keep that cash for myself, 38 00:02:44.480 --> 00:02:48.400 because I had almost no cost besides my airfare, my hotel, and the ad spend, which usually for me was 39 00:02:48.400 --> 00:02:53.040 like one to three grand. So not a lot. Mind you, remember that like big crazy return on capital? Like, 40 00:02:53.040 --> 00:02:59.840 I spend two grand and I make a hundred good returns. Now, I had this little system and it worked. 41 00:02:59.840 --> 00:03:04.640 And I have any employees who's a great life. I just fly out, make a hundred grand, fly somewhere else. 42 00:03:04.640 --> 00:03:09.520 And I have to worry about any fulfillment. I just sell all day long. I would make calls and I'd sell. 43 00:03:09.520 --> 00:03:14.880 That was it. That was my entire life, 12 hours a day, nine and nine, I'd sell. And one gym owner was 44 00:03:14.880 --> 00:03:21.120 like, Hey, you're leaving so much money on the table. Red flag number one, you always leave money 45 00:03:21.120 --> 00:03:25.760 on the table, because you can't pursue every opportunity. So it's the definition of entrepreneurship 46 00:03:25.760 --> 00:03:29.920 that you have to say no, which means there's always money you could make, but you choose to leave 47 00:03:29.920 --> 00:03:34.480 small amounts of money on the table so that you can have the one pile of money that is on the 48 00:03:34.480 --> 00:03:38.960 table that you're choosing to play at get bigger. All right. Big lesson that took me way too 49 00:03:38.960 --> 00:03:43.040 fucking long to learn. So he's like, Hey, man, you're leaving all this money on the table. And me 50 00:03:43.040 --> 00:03:48.160 being the greedy new entrepreneur that I was, I was like, well, shoot, I should get that money too. 51 00:03:48.160 --> 00:03:51.920 Right? He's like, you're opening these gyms and you're filling them up to full capacity. He's like, 52 00:03:51.920 --> 00:03:56.640 you should own them. Like you shouldn't just be flying out and filling them up. Now, meanwhile, 53 00:03:56.640 --> 00:04:01.280 side note, average gym owner makes $36,000 a year for a full year of work working eight hours a week. 54 00:04:01.280 --> 00:04:07.840 I was making 100 grand in 21 days and walking away. Way better business. But me being a moron, 55 00:04:07.840 --> 00:04:13.200 I was like, sure, this is what a moron would do. So I should do it. And so he says, how about this? 56 00:04:13.200 --> 00:04:19.680 I used to run this gym that we were doing $4.2 million a year out of. I know how to run a gym. 57 00:04:19.680 --> 00:04:23.520 I don't know the marketing sales stuff. You go to the marketing sales. I'll come behind you and 58 00:04:23.520 --> 00:04:26.960 I'll run the gym after you. So he's like, every month you open a gym, you fill it up. I'll come 59 00:04:26.960 --> 00:04:30.640 behind you. I'll staff it. He's like, every month you can open a gym. And I was like, man, that means 60 00:04:30.640 --> 00:04:34.080 at the end of the year, I'll have 12 gyms. That means that my ego will go up and I can tell people 61 00:04:34.080 --> 00:04:39.760 have 12 gyms. And so I said, sure, deal. So I launched this gym across that. And so he's like, hey, 62 00:04:39.760 --> 00:04:44.160 so now let's do this next gym. And I got this perfect place picked up. It's super nice. Whatever. 63 00:04:44.720 --> 00:04:49.600 So he said, okay, as we're about to sign the links, he says, small detail. You know, I had a little 64 00:04:49.600 --> 00:04:54.560 bit of a bad credit situation, big misunderstanding, but you're going to have to personally guarantee the 65 00:04:54.560 --> 00:05:00.000 lease. And I was like, sure, make sense. We're partners. I'll personally guarantee it. He's like, 66 00:05:00.000 --> 00:05:04.960 also, I mean, you just made all this money on my gym. You should front the cost for the new location. 67 00:05:04.960 --> 00:05:10.160 And I said, of course, what? How could I expect to do that? He's like, also, you should run the whole 68 00:05:10.160 --> 00:05:13.760 thing. And then I'll come after you. I was like, okay, so I'll take the risk, do all the money, 69 00:05:13.760 --> 00:05:17.120 and do all the work. And then you'll have half. And he's like, yeah, I was like, oh, 70 00:05:17.120 --> 00:05:23.200 steal. What a great partner. And so that's what I did. And so I crushed this launch to 370 71 00:05:23.200 --> 00:05:28.080 sales in like six weeks, like new members. But mind you, the way that I was launching this gym, 72 00:05:28.080 --> 00:05:33.680 I put all the cash into the account and like all this cash, my big easter egg, because I didn't 73 00:05:33.680 --> 00:05:37.120 understand how money worked. So I was just like, because I lived out of my business account, 74 00:05:37.120 --> 00:05:41.120 which many small business owners do is it was like, it's my money, whatever. And we were partners. 75 00:05:41.120 --> 00:05:47.040 And I never had a partner steal from me before. And so I just had no idea that you shouldn't trust 76 00:05:47.680 --> 00:05:50.800 people. And so I put all the money into the new bank account for the new NC, because I was going 77 00:05:50.800 --> 00:05:56.640 all in on this new idea and start selling. And more and more cash comes in. And then I wake up 78 00:05:56.640 --> 00:06:00.480 a morning, because I would always check the bank account every morning, because it was a habit. And 79 00:06:00.480 --> 00:06:08.480 all of a sudden, it was at zero or close to zero. And I paid it. I thought there was like a 80 00:06:08.480 --> 00:06:12.320 fraudish. I didn't even know what happened. So I called him up and I was like, dude, bank 81 00:06:12.800 --> 00:06:16.400 he was like, oh, yeah. And I looked at where the withdraw was actually just one withdrawal. And it 82 00:06:16.400 --> 00:06:23.520 was to him. And I was like, huh, what? And he was like, oh, yeah, I was just taking my half. And I was 83 00:06:23.520 --> 00:06:30.480 like, heck, what? He was like, of the money. He's like, I know you're taking your half off the top. 84 00:06:30.480 --> 00:06:34.320 He's like, I'm just taking my half. He's like, I did the math. He's like, this is how much my 85 00:06:34.320 --> 00:06:39.440 half should be. And I was like, first off, you're accusing me of stealing. Second off, what? 86 00:06:40.080 --> 00:06:43.440 And so I was so distraught by this. I had a coach at the time. And I was like, dude, 87 00:06:43.440 --> 00:06:47.840 what should I do? And he's like, confront the facts. Honestly, a wonderful coach at the time. He 88 00:06:47.840 --> 00:06:52.960 said, print out the financials. Go line by line. It's show them where all the costs were. And I was 89 00:06:52.960 --> 00:06:58.080 like, okay, so I printed all the all the expenses. It took me like three hours. I analyzed everything. 90 00:06:58.080 --> 00:07:01.760 And I was like, let's go have lunch and like, let's go over this. And so I was going to meet up 91 00:07:01.760 --> 00:07:06.160 with him. Very tense. And I sit the papers down. I was like, let's, I was like, I want to go over 92 00:07:06.240 --> 00:07:11.440 this. Like, like, that profit wasn't yours. Like, that's not yours to take. And I put the papers 93 00:07:11.440 --> 00:07:15.040 down and he pushed them off the table. He said, I don't need to see that shit. And I was like, 94 00:07:15.040 --> 00:07:24.240 oh, I just got robbed. And so at that point, I was like, well, shit. And so then he ended up 95 00:07:24.240 --> 00:07:28.720 sending the money to his girlfriend in Sweden and filing bankruptcy seconds. So now here's the 96 00:07:28.720 --> 00:07:32.160 little wrinkle in the story. So remember when I said, like, he said, oh, there's this big misunderstanding 97 00:07:32.160 --> 00:07:38.000 early on with the whole least thing. He had been indicted for fraud before that. I knew about 98 00:07:38.800 --> 00:07:43.360 and he was like a big misunderstanding. And I was like, of course, we've all had misunderstandings. 99 00:07:43.360 --> 00:07:47.600 And honestly, it was because I had a desire because like, I have my own demons of like, I fucked 100 00:07:47.600 --> 00:07:53.840 up in the past two. And I'm trying to, you know, do good now. And so I want to always give people 101 00:07:53.840 --> 00:07:57.360 that benefit of the doubt. And I'm going to say something that probably won't be popular. 102 00:07:58.240 --> 00:08:03.680 I don't do that much anymore. And it's because there's just plenty of people I can partner with 103 00:08:03.680 --> 00:08:08.480 that I don't have to do with that for. And there's somebody else who will get robbed by that guy who's 104 00:08:08.480 --> 00:08:12.960 been indicted and who will give him that chance. And it'll work out. I'm just not willing to take 105 00:08:12.960 --> 00:08:19.120 that chance anymore because I don't need to. And so here's my little TLDR lesson on this. 106 00:08:20.000 --> 00:08:26.000 If someone shows you who they are, believe them the first time. How many red flags that I tell you, 107 00:08:26.080 --> 00:08:30.240 like, I have to sign the thing. I have to front the work. I have to front the capital. Oh, 108 00:08:30.240 --> 00:08:33.600 by the way, when he was supposed to come and take over the gym, he was like, oh, no, you keep 109 00:08:33.600 --> 00:08:36.880 having it. I was like, wait, what? This wasn't the deal. I'm going to watch one of these every month. 110 00:08:36.880 --> 00:08:40.080 He was like, no, no, I'm busy over here. And I was like, no, I'm not running a gym again. I just 111 00:08:40.080 --> 00:08:44.560 sold all my gyms. Like I'm not doing this again. And that's the one that I shut down. That's the one 112 00:08:44.560 --> 00:08:53.040 I shut down. And so yeah, red flags are red flags for a reason. Stop. Avoid bad partners. And with 113 00:08:53.040 --> 00:08:57.120 that one, I lost, I'm not even going to tell you the amount of money that I lost because I will 114 00:08:57.120 --> 00:09:03.520 tell you what's more important is that I lost all my money. And what felt like years of work. And 115 00:09:03.520 --> 00:09:08.720 so from a lost perspective, it was the amount of money was one of the smaller ones in terms of 116 00:09:08.720 --> 00:09:13.280 total dollar amount that I lost. But in terms of emotional significance of everything that I had built. 117 00:09:13.280 --> 00:09:17.840 Because remember, I had spent all these years not making money. I had finally scaled the locations. 118 00:09:17.840 --> 00:09:22.320 I had something that was working. I got this nest egg from a sale. I had to hustle my ass off to 119 00:09:22.320 --> 00:09:26.480 sell these five locations. Like getting five deals done. It's not easy. I got five deals done. I 120 00:09:26.480 --> 00:09:31.360 did it in like 90 days or 120 days to close these deals. I finally had something to show for it. 121 00:09:31.360 --> 00:09:34.720 So I actually felt like a little bit of success story to myself. Like you think about story. Tell 122 00:09:34.720 --> 00:09:40.080 yourself, like I went from a multi location gym owner to successfully exiting my gyms to losing 123 00:09:40.080 --> 00:09:47.200 everything that I had spent years building in six months. Wild ride. I recommend watching someone 124 00:09:47.200 --> 00:09:52.960 else ride and not needing to ride for yourself. All right. So use that lesson so you don't have to 125 00:09:52.960 --> 00:09:57.280 have the scar. All right. So if you don't know what the push in pivot dichotomy is for most entrepreneurs 126 00:09:57.280 --> 00:10:00.800 and most people in general say, there are some times where shit gets hard and you need to push through 127 00:10:00.800 --> 00:10:04.640 it. And there are other times where your fundamental assumptions were wrong and you need to pivot. 128 00:10:04.640 --> 00:10:07.920 You need to change direction because the thing that you originally thought was true is no longer or 129 00:10:07.920 --> 00:10:11.840 you found out that it isn't. And so the hard part is sometimes when you're in the thick of it, 130 00:10:11.840 --> 00:10:15.200 you're not sure if this is a push or this is a pivot. It's one of the hardest decisions 131 00:10:15.200 --> 00:10:19.360 in entrepreneurship. And there's a lot of crazy stories of people who were digging for gold for 132 00:10:19.360 --> 00:10:24.320 four years and then quit. And the next guy buys the piece of land and two weeks later strikes gold 133 00:10:24.320 --> 00:10:28.400 and gets rich. Right. That guy should have pushed. On the flip side, there's the people who spend 134 00:10:28.400 --> 00:10:32.320 nine years on a losing idea and then just lose everything. And that's it. That's the end of the story. 135 00:10:32.320 --> 00:10:36.640 Right. And they should have pivoted. And so there are dead bodies on either side of this road and 136 00:10:36.640 --> 00:10:39.840 it's hard because you just got to use judgment to be able to make the best guess you can and the 137 00:10:39.840 --> 00:10:44.400 thing is you can never replay the game. I just do the best you can. All right. Now for me, I was an 138 00:10:44.400 --> 00:10:49.360 employee. So I graduated three years from Vanderbilt and I got a job at a management consulting firm 139 00:10:49.360 --> 00:10:52.480 that did space cyber at least the projects I worked on with space cyber intelligence in the military. 140 00:10:52.480 --> 00:10:56.320 So the PT firm defense contracting. That's what I worked on sounded fancy. That's why I took it. 141 00:10:56.880 --> 00:11:03.840 Now when I was there, I had the desire to learn. And what was interesting is that I did learn 142 00:11:03.840 --> 00:11:09.680 a lot quickly in the beginning. But after that period of time, which might be took 69 months, 143 00:11:10.240 --> 00:11:16.720 I didn't feel like I had more to learn. And so I had two options and I took neither of them. 144 00:11:16.720 --> 00:11:22.240 And I think that was the real mistake. And so I could have gone up to my spiritual and like, hey, 145 00:11:22.240 --> 00:11:26.480 I'd like to be challenged more. I'd like to develop in these ways. Can you give me these things so 146 00:11:26.480 --> 00:11:30.000 that I can get better and learn these skills? Because that's what I'm here for. On the other hand, 147 00:11:30.000 --> 00:11:34.320 if I didn't want to do that, I could have had the balls to fucking quit because I had some money 148 00:11:34.320 --> 00:11:39.280 saved up and could have decided to go on a management career. Now, if I had gone a management career, 149 00:11:39.280 --> 00:11:44.400 whatever I made this year, I would have made last year. And so a lot of money is the cost of 150 00:11:44.400 --> 00:11:49.120 this mistake if we just took it on a one year basis or one and a half year basis. So it'd be more 151 00:11:49.120 --> 00:11:54.960 than that suitcase worth. So a lot. But on the flip side, maybe if I had gone up a level and 152 00:11:54.960 --> 00:12:00.320 asked for more skills, maybe I'd be here also faster. But the real mistake was that I didn't push 153 00:12:00.320 --> 00:12:05.600 and I didn't pivot. I did nothing. I coasted. I just checked in. And it got to the point actually, 154 00:12:05.600 --> 00:12:08.960 like I actually only think I've ever talked about this. We're at the end of my stay there. 155 00:12:09.520 --> 00:12:15.280 My boss is pretty much like, I don't kind of want you here. Because like you don't really do anything. 156 00:12:15.920 --> 00:12:22.000 And so I think this might resonate for some of you, which is that like I was actually in that job 157 00:12:22.000 --> 00:12:27.120 a fairly bad employee. Now you can look at work environment, you can look at people you work with, 158 00:12:27.120 --> 00:12:32.880 whatever. I was a bad employee. And I would actually agree with them because I didn't get challenged 159 00:12:32.880 --> 00:12:38.880 in that last period. And so I just read books all day. I just like they had a big library of 160 00:12:38.880 --> 00:12:42.880 books. And so I just read all that. I would just sit in my desk. I'd grab a book and I would read 161 00:12:42.880 --> 00:12:46.320 I'd read business strategy stuff and I'd read whatever because that was my attempt. Now I could have 162 00:12:46.320 --> 00:12:50.080 learned so many more value like learning from book is one thing in its valuable. It's way more 163 00:12:50.080 --> 00:12:54.320 valuable to have somebody in real time giving feedback on a skill. That's why jobs. I'm such a 164 00:12:54.320 --> 00:12:58.000 proponent of like if you don't know what to do, go work at a job in a business you want to learn 165 00:12:58.000 --> 00:13:02.240 from in a small business, ten or so employees. So you can learn and taste all the different departments. 166 00:13:02.240 --> 00:13:05.440 You can learn how business works. And then you can go do something else and you can learn different 167 00:13:05.440 --> 00:13:08.880 skills that you can apply later. And you get paid to learn where otherwise you don't get paid to 168 00:13:08.880 --> 00:13:15.760 learn. But otherwise I was basically just learning on their dollar and I left because they kind of 169 00:13:15.760 --> 00:13:20.560 wanted me to leave too. And so I was kind of forced to go. And so at that point it was either go to 170 00:13:20.560 --> 00:13:24.000 business school or start something else. And so that's why I decided to start something else. 171 00:13:24.000 --> 00:13:26.720 But a lot of people don't know that story. I was actually it's weird because I was an exceptional 172 00:13:26.720 --> 00:13:31.840 employee at every place I worked before that. But that place I was honestly a horrible employee. 173 00:13:31.840 --> 00:13:37.280 And so I will say this. If you are somewhere where you know deep down you are not living up to 174 00:13:37.280 --> 00:13:40.080 your potential and you are cutting corners and you're looking at the clock and you're trying to 175 00:13:40.080 --> 00:13:42.720 just like count minutes and you're like holy shit it's only been an hour I've seven more hours of 176 00:13:42.720 --> 00:13:49.040 this shit. Like if you were living like that, leave. I promise you whatever the alternative is is 177 00:13:49.040 --> 00:13:52.800 better. It's kind of like people get stuck in a relationship and they're like why don't be alone. 178 00:13:52.800 --> 00:13:56.560 But they don't play out the alternative of like so rather than be alone you'd rather be miserable 179 00:13:56.560 --> 00:14:00.320 in a relationship with the rest of your life. That's what you think is better than alone. And another 180 00:14:00.320 --> 00:14:04.720 work for alone is on your own which sounds way better. So like just reframing that. And so for 181 00:14:04.720 --> 00:14:10.400 me I was so afraid of being unemployed same idea. Also I was pursuing entrepreneurship. I wanted to 182 00:14:10.400 --> 00:14:14.960 do my own thing. And so you could be unemployed or doing your own thing which is what I ended up 183 00:14:14.960 --> 00:14:20.080 doing. And so I think if you're in that spot it was one of the most costly mistakes I made. 184 00:14:20.080 --> 00:14:24.320 Also because of what I started feeling about me you know what I mean? Because I was like am I a 185 00:14:24.320 --> 00:14:30.560 slacker? Like I am slacking. I'm not working hard. I know that. And they do that too. And so they 186 00:14:30.560 --> 00:14:35.840 start treating you like you don't work hard and they start believing them. And so part of this is 187 00:14:35.840 --> 00:14:40.240 why I was so miserable in that period of time because it wasn't me like I work all the time. And so 188 00:14:40.960 --> 00:14:45.600 if you're in that zone it is one of the biggest mistakes of your career. Do something. Just don't 189 00:14:45.600 --> 00:14:51.920 do this. Push pivot push being go up. Let me learn more. Give me a challenge pivot being I'm 190 00:14:51.920 --> 00:14:56.960 going to change career paths. I did nothing until it was forced upon me. And so I told the story 191 00:14:56.960 --> 00:15:01.760 before I think that there's a very hot possibility that I would have stayed in employee. If I had 192 00:15:01.760 --> 00:15:06.720 liked that job a little bit it's very likely I would have stayed in employee. I only got in this 193 00:15:06.720 --> 00:15:11.360 game because I kind of was forced to. And some of you are in that position right now. So I feel 194 00:15:11.360 --> 00:15:15.840 you and there's nothing wrong with you. And if you were a good student so was I. So like you don't 195 00:15:15.840 --> 00:15:19.680 have to be like ADD and dyslexic and like all these entrepreneurs stories like school families. 196 00:15:19.680 --> 00:15:23.760 Well didn't fail me. I fucking did homework and I did a good job. So like I just see that as 197 00:15:23.760 --> 00:15:25.840 anyone can win if you try hard.