WEBVTT

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I like trying to solve the problem rather than saying,

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cool, that's the equation.

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I have a fundamental belief about the world that,

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like, if you ask the right questions, you can solve the problem.

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And I just believe that if we're creative enough,

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we can figure out a way to make it grow profitably.

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Welcome to the game where we talk about how to get more customers,

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how to make more customers, how to keep them longer,

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and the many failures and lessons we have learned along the way.

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I hope you enjoy and subscribe.

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We are here with the man with the greatest beard on the internet

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who might enjoy talking about Chipotle even more than I do.

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Mr. Alex Hermosi.

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Thank you for having me.

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How are you doing, man?

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I'm able to be here.

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I'm actually pretty, I feel like you're just slightly disappointed.

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You thought I owned a bunch of companies.

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You're not the first person.

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Because in my bio, it just links them down below.

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So people are like, damn, you own movement and ghost.

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That's what I said.

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And in the other two companies, I don't know about.

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No, it's all good.

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Well, I'm glad that you worked with those guys,

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because it's still very cool brands.

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Yeah, absolutely, man.

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Well, for people that don't know you,

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why don't you just, I like to say like, what's your uber pitch

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of if someone's just like, who are you, what do you do

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in your, like in a car somewhere?

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What's your, like, quick little identifier?

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Started with the chain of gyms out of the South of California.

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I sold those, kept the IP, started licensing the model

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to just under 5,000, actually, I think we're just over 5,000 locations now.

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Sold two-thirds of that company last year,

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and some ancillary companies that went with that.

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At 46.2 million to private degree firm out of San Francisco.

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And during that whole period of time,

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it was a very cash flow positive company.

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And so we started doing a lot of private investing.

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And right now, we started acquisition.com,

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not right now, I mean, two years ago.

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I started acquisition.com and that poor fully of companies

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does about $200 million a year.

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I was going to be like, and I have,

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and I make a lot of content now just to help other people do it too.

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And hopefully, uh,

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grow their business as big enough that we could,

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you know, invest in them someday.

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That's what you would tell a new driver.

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Yeah.

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That exact specific.

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Well, I have a long ride.

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I got 10 minutes.

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He's going to just have to listen to it, you know?

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He's been like, God damn, I didn't need the whole life story.

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Yeah.

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Well, so, like, generally when I interview like any sort of guest,

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I like to do some sort of, you know, deep dive on them,

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so I don't come in fully looking like an idiot.

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But I like to also not, you know, know everything about them.

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So I'm kind of fresh.

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And I'm very, you know, on the internet,

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you're the, the $100 million man everyone likes to refer to you as.

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Do you like that name?

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I mean, it'll, it's a little under now.

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And it's, you know, in five years, I'll hate the name.

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So, you know, it's kind of disrespectful to only call me the $100 million van.

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It's, I mean, it's, I'm, I'm honored.

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It's very nice.

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If I'm flattered by it.

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And a lot of it is because of the book.

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So 100 million dollars offers was because I think at that point,

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when I wrote the book, um,

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you know, we'd done 120 millionish in cumulative sales.

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And so I was like, here's the stuff that we learned about making offers.

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And so I just put it in the book.

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And I think people just took that title and, you know, slapped it on me.

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Do you think people who like own businesses,

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or whatever, when they get to $1 million,

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they like, they're for themselves to as a millionaire?

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Is that like when the moment you hit $100 million,

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like, I'm 100 millionaire?

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I actually made a, a video about this.

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But there's like seven different ways I've seen people talk about,

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like, their net worth.

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Most of them false.

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But there's like, how much total sales I've done over the lifetime of my business

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is like total revenue.

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And then it's, um, you know,

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one step underneath that would be, uh,

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like the value of the company based on equity.

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And then another one underneath that would be like,

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what their current run rate is.

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And then another one is like what their profit is.

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And then another one would be like what their cash flow is.

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And so I'll say one of the things that I have feel like I've learned

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is like the wealthier you become,

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the more amorphous what net worth even means is.

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A amorphous.

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Yeah, it's just, it's muddy.

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It's murky.

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It's not, uh, like when you're poor, you know,

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exactly what you have because you don't have much and you can count it on your fingers.

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Right.

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When you have a lot,

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then it's like, well, what's the value of the 28% stake I have in this business

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that we're not planning on selling and we're reinvesting profits into?

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Yeah, I don't know.

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I mean, I could probably sell that to different people for different prices.

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Like, and then I would, so a lot of, a lot of assets aren't liquid.

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And so even, even when you, it's kind of funny,

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because like going through the sale process,

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you get a big chunk of cash and then after that,

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you then have to allocate the cash.

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So when people were like, oh, this guy's worth a billion dollars.

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It's not like he has a billion dollars in his bank account.

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He just owns something that is worth a billion dollars,

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which is very different.

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You know, the only time that it's, I feel like it's more accurate

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is once you go into a public market,

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the equities you have are tradable and you can take loans against them,

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you know, immediately.

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And so in that way, you really are,

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at least in my opinion, like, the billion is more real.

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Yeah.

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Then if you're in private equities,

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which, you know, things are illiquid,

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it takes six to 12 months to be able to sell

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or kind of transact in any way.

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And it's based on what the market looks like then

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and what buyers are available.

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Do you think a lot of people say different,

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you run up a lot of good points about when,

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when I, when you talk to businesses of like,

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yeah, our business, you know, it's like,

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how much have you done to like 50 million dollars?

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That's crazy, like, you know, 2022,

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they're like, oh, no, like lifetime.

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Do you think there's a reason why some people will,

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like, there's different types of personalities

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of business of like, when I say a revenue number,

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it's that year, not lifetime.

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And then even it was relatively recent to me,

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I never ran into someone until,

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talking about like run rate of like,

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that's not what they're actually gonna do this year.

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That's like, what they would do if this best month

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continued for the next 12 months.

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That's what they would do.

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Like, why do you think people,

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I don't wanna say they can inflate it,

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but is do you think that's kind of like what they're doing?

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Yeah.

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Making it sound better than it, not that it's bad, but.

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Yeah, I think it's status.

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Yeah, it's like, it's always a way of like,

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bumping their status like up one level,

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like rounding up.

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It's something that I actually work on a lot

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is like try not to round up.

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I like, I'm not perfect at it,

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but like I try not to round up.

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You're a round downer.

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Actually, I wanna be accurate.

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So 46.2.

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Yeah, I never say he said that like, yeah.

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Not more or less, and then trying not to qualify

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because to very rich people that is nothing

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and to very poor people that is everything.

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And so I can't guess what someone's gonna see by that,

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so it's just, that's what it is.

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Okay.

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And with acquisition.com, if I was a golden doodle,

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how would you explain what acquisition.com is?

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We are minority investors in companies

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that are between three and a hundred million a year.

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And so we take minority stakes typically

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between 20 and 33% of those businesses.

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And we, depending on the business,

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we're either investing for cash flow

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for some sort of return,

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or we're reinvesting cash into the business

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so that we can eventually sell it later.

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It really just depends on the businesses

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at a long-term hold.

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Is it like a fix and flip?

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It just depends on the business,

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but typically we are minority investors in those companies.

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And we bring a lot of hands-on help to grow the business.

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And so we get discounts for the valuations et cetera

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that we invest in those companies

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because we are hands-on,

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which is not typical for minority partners.

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Most times they write the check and they wanna ride,

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just ride along and usually just get the founder

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some sort of cash.

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No cash usually exchanges hands from us to the founder

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because we're either investing into the business

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so that it can grow,

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or we're doing something in kind

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because it's based on the amount of value

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that we're gonna provide.

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I noticed when I went to acquisition.com,

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there's not that golden doodle spiel on it.

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It's like, it seems to be good.

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You just like have to know what,

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is it like you have to know what it is to,

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like you should know what it is

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before you even go to the website type of thing?

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I think it's just because the vast majority of people

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that do go to the site do know what it is

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because they've consumed something or multiple things.

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Like in order for somebody to say,

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oh, I'm going to go to acquisition.com,

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they would usually have consumed at least,

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a few pieces of content of mine before they would go there.

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I mean, if they click investment thesis

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or any of the other links on there,

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but I come from a direct response background.

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And so having something that's optimized for conversion

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is always forefront of mind.

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And so if I had a big paragraph of what we do

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on the homepage, I guarantee you

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I would have fewer deals that would be coming to me.

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You think that fewer deals.

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100%.

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I could prove it.

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100%.

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And did you were able to snag acquisition.com

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or do you have to buy that?

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I bought it.

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How much did the website cost you?

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I think it's $370 something.

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$370?

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1000.

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What the fuck?

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Yeah.

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Was it someone just what they call like domain squatting

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or domain shark?

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It wasn't like someone had a business

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and you're like, hey, you know, I can do better.

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It's just the name.

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What the fuck, man?

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Yeah.

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Did you just talk it down?

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What was the original price?

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No, I just came in and asking.

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They were in talks for somebody else.

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They're not a negotiator.

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I am, but it's like, what's the, what's the goal, you know what I mean?

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For me, the cost of negotiating it, because you had another buyer that they had been

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haggling with.

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And so I figured that the seller was kind of tired of haggling with this other guy.

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For like, I think the number that they were at was like 325 or something like that.

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And they were trying to create some sort of payment plan.

258
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And I was like, I'll pay $370 today cash just why it's like, I can wear it tomorrow.

259
00:08:53.360 --> 00:08:55.360
And so they deal close in like two days.

260
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And they had been in talks for like two months.

261
00:08:57.000 --> 00:08:58.000
Yeah.

262
00:08:58.000 --> 00:09:02.000
And so for me, it's like, what's the, like, is there actually a difference in how much value

263
00:09:02.000 --> 00:09:06.400
I'm going to get out of something if I pay $50,000 less or the downside risk of me just

264
00:09:06.400 --> 00:09:09.640
not getting it for me is significantly higher.

265
00:09:09.640 --> 00:09:12.480
And I would say that one of the things that I have changed over time is that I used to

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00:09:12.480 --> 00:09:16.400
haggle every single nickel and dime and I value speed more now because the opportunity

267
00:09:16.400 --> 00:09:21.160
cost of the time that I wouldn't have it, I will make more money having it sooner and

268
00:09:21.160 --> 00:09:23.360
I'll make up the cost difference with speed.

269
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I guess I guess in my brain, I mean, I know, you know, it's all relative to, I guess,

270
00:09:27.640 --> 00:09:29.680
your income totally that you have.

271
00:09:29.680 --> 00:09:34.240
But in my head, I'm like, don't you think like an email of like, would you take $350?

272
00:09:34.240 --> 00:09:36.400
Save you $20,000?

273
00:09:36.400 --> 00:09:37.400
It just wasn't.

274
00:09:37.400 --> 00:09:38.400
It is what it is at this point.

275
00:09:38.400 --> 00:09:39.560
I want to just get the deal done.

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How many of the businesses that acquisition.com invest in, would you say get acquired?

277
00:09:44.320 --> 00:09:47.920
Because that's it and go like to the businesses that would sell.

278
00:09:47.920 --> 00:09:50.720
Would you say, do you have like a success rate or anything?

279
00:09:50.720 --> 00:09:53.840
So for us, we're two years in to the minority investment.

280
00:09:53.840 --> 00:09:57.080
So even in a normal deal cycle, you know, I probably wouldn't sell it.

281
00:09:57.080 --> 00:10:01.120
Like, unless we're just flipping a company which is not really our model, like I would

282
00:10:01.120 --> 00:10:02.880
prefer to hold all of them forever.

283
00:10:02.880 --> 00:10:04.280
That's my preference.

284
00:10:04.280 --> 00:10:06.360
I am a minority in a minority position though.

285
00:10:06.360 --> 00:10:10.320
And so if the founders, like I really want to sell, then we'll say, okay, then let's get

286
00:10:10.320 --> 00:10:14.520
it ready to sell and that might take 24 months to like, you know, do a couple of low hanging

287
00:10:14.520 --> 00:10:19.320
fruit, increase the cash flow, you know, add a couple of value ads that would be, you

288
00:10:19.320 --> 00:10:21.480
know, significantly increase the enterprise value of the multiple we'd be able to get

289
00:10:21.480 --> 00:10:23.480
on the company.

290
00:10:23.480 --> 00:10:26.320
And then we can, you know, go to market and that going to market process takes 12 months

291
00:10:26.320 --> 00:10:27.320
just on its own.

292
00:10:27.320 --> 00:10:28.520
Like once the company is ready, it's another year.

293
00:10:28.520 --> 00:10:30.280
Do you think a lot of people invest?

294
00:10:30.280 --> 00:10:34.720
Obviously, they get it from you, but like, do they expect that Alex is going to promote

295
00:10:34.720 --> 00:10:38.480
my company now or is that not really part of the, like you're going from my expertise

296
00:10:38.480 --> 00:10:40.000
of myself and my team.

297
00:10:40.000 --> 00:10:43.840
It's not that you're going to be a spokesperson model for, look at this chapstick brand that

298
00:10:43.840 --> 00:10:44.840
I invested in.

299
00:10:44.840 --> 00:10:45.840
Correct.

300
00:10:45.840 --> 00:10:50.080
So I am not, I don't, I don't endorse any of the companies that we have.

301
00:10:50.080 --> 00:10:52.680
And there's, there's a couple reasons for that.

302
00:10:52.680 --> 00:10:56.080
One is if I'm going to really endorse something, I do want to have it for a very long time

303
00:10:56.080 --> 00:10:57.600
or forever.

304
00:10:57.600 --> 00:10:59.080
I usually want to have control.

305
00:10:59.080 --> 00:11:05.280
So I'd want to be majority likely or at least 50, 50 in the business, most times.

306
00:11:05.280 --> 00:11:08.120
That, I mean, there are special circumstances if it's a massive company and like, it would

307
00:11:08.120 --> 00:11:09.120
make sense.

308
00:11:09.120 --> 00:11:13.520
I'd be open to it, but it would definitely be an additional, like an additional negotiating

309
00:11:13.520 --> 00:11:14.520
point.

310
00:11:14.520 --> 00:11:16.360
The biggest risk for me is brand.

311
00:11:16.360 --> 00:11:17.360
Yeah.

312
00:11:17.360 --> 00:11:21.760
And so like, you know, making an endorsement is, is a big investment because I'm really

313
00:11:21.760 --> 00:11:26.720
betting that this guy, a gal company is not going to do anything really dumb.

314
00:11:26.720 --> 00:11:29.400
And that's tough because there's a lot of people in businesses, you know, if, if you're

315
00:11:29.400 --> 00:11:34.600
ahead of marketing, you know, DM some girl who's underage and he doesn't, and it becomes

316
00:11:34.600 --> 00:11:35.600
this whole thing.

317
00:11:35.600 --> 00:11:37.680
And then my brand gets associated with it.

318
00:11:37.680 --> 00:11:40.200
It's, there's just like, I can control me.

319
00:11:40.200 --> 00:11:43.840
And so if I'm going to do it, I want to have as much control as I can.

320
00:11:43.840 --> 00:11:45.440
And so that's why I don't normally do that way.

321
00:11:45.440 --> 00:11:50.080
It's also a little bit of a risk to the business because if I'm a huge driver of value to

322
00:11:50.080 --> 00:11:54.400
the business in terms of percentage of sales, et cetera, then it does make it more difficult

323
00:11:54.400 --> 00:11:57.760
to sell because then the acquirer would have to make a deal with me and a deal with the

324
00:11:57.760 --> 00:11:58.760
company.

325
00:11:58.760 --> 00:11:59.760
Right.

326
00:11:59.760 --> 00:12:04.200
So we do this ultimately to make the companies independently more valuable rather than make

327
00:12:04.200 --> 00:12:09.680
them dependent on us, which is kind of like the fast track bandaid, but I think long-term

328
00:12:09.680 --> 00:12:12.680
robs them of the value that we, that they could make on their own.

329
00:12:12.840 --> 00:12:16.480
You're essentially, I mean, not, do people just compare you to a shark tank kind of sort

330
00:12:16.480 --> 00:12:17.480
of all the time?

331
00:12:17.480 --> 00:12:25.320
You're like a better looking Kevin O'Leary, a more jacked Kevin O'Leary, with significantly

332
00:12:25.320 --> 00:12:26.320
more hair.

333
00:12:26.320 --> 00:12:27.320
Yeah.

334
00:12:27.320 --> 00:12:31.760
Speaking of, speaking of, I guess like, you know, bringing up shark tank in the acquisition

335
00:12:31.760 --> 00:12:34.920
and, you know, percentages and minority stakes.

336
00:12:34.920 --> 00:12:38.360
A lot of people that, you know, I, I'll, I'll refer to shark tank because I think a lot

337
00:12:38.360 --> 00:12:41.120
of people understand that show.

338
00:12:41.120 --> 00:12:44.800
You'll see a lot of people come in and maybe, you know, people, hey, Alex, I want you to

339
00:12:44.800 --> 00:12:45.960
invest in this.

340
00:12:45.960 --> 00:12:52.200
We're doing what I see a lot on episodes is, is people undervalue, valuing or overvaluing

341
00:12:52.200 --> 00:12:53.200
their company.

342
00:12:53.200 --> 00:12:56.960
And a lot of times, even I'm a little bit confused when the sharks or you would be like,

343
00:12:56.960 --> 00:12:58.280
it's not worth that.

344
00:12:58.280 --> 00:13:02.760
If, if some of companies like, you know, we're, we're doing $10 million in sales.

345
00:13:02.760 --> 00:13:06.200
Our business is worth $10 million and they get, they're like, no, it's not.

346
00:13:06.200 --> 00:13:10.280
It's only worth, how much cash you have in the bank, like, what is the biggest misconception

347
00:13:10.280 --> 00:13:15.640
people have with value, with valuations beyond like their own ego of like, no, it's worth

348
00:13:15.640 --> 00:13:16.640
a whole lot of money.

349
00:13:16.640 --> 00:13:17.640
Yeah.

350
00:13:17.640 --> 00:13:21.120
So fundamentally when somebody's buying a company, they're buying a percentage of future

351
00:13:21.120 --> 00:13:22.440
profits, right?

352
00:13:22.440 --> 00:13:27.440
And so the question is, how, how profitable will the company be if it's in the future?

353
00:13:27.440 --> 00:13:31.680
How long is that sustainable and what is my risk associated with that?

354
00:13:31.680 --> 00:13:35.240
And so if there's, if there's a business that's incredibly transactional, has a single

355
00:13:35.240 --> 00:13:38.000
point of failure that's found or led and they're the face and they're the one that drives

356
00:13:38.000 --> 00:13:42.160
all the business, that person gets hit by a bus, the company's dead, right?

357
00:13:42.160 --> 00:13:44.360
That person gets in a scandal at the company's dead.

358
00:13:44.360 --> 00:13:47.840
And so you want to have as few, like, you want to have multiple stream, you know, multiple

359
00:13:47.840 --> 00:13:49.160
different sources of acquisition.

360
00:13:49.160 --> 00:13:52.280
You want to have customers that return for a very long time, you want to have some sort

361
00:13:52.280 --> 00:13:56.000
of unique mechanism if possible that gives, and it could not necessarily even be about

362
00:13:56.000 --> 00:13:57.000
the product.

363
00:13:57.000 --> 00:13:58.000
It'd be unique mechanism for acquisition.

364
00:13:58.000 --> 00:13:59.000
It could be unique.

365
00:13:59.000 --> 00:14:02.560
Like, just some element that makes it a little bit different that gives some sort of competitive

366
00:14:02.560 --> 00:14:05.320
advantage or cushion against the new entrance that's going to try and just copy and rip

367
00:14:05.320 --> 00:14:06.320
off the same thing.

368
00:14:06.320 --> 00:14:09.600
Brand would be an example of that, which is why Warren Buffett talks about buying big

369
00:14:09.600 --> 00:14:10.600
brands.

370
00:14:10.600 --> 00:14:11.600
Like, anybody can recreate the Apple iPhone.

371
00:14:11.600 --> 00:14:12.600
I mean, shoot.

372
00:14:12.600 --> 00:14:13.600
China does it all the time.

373
00:14:13.600 --> 00:14:14.600
Yeah.

374
00:14:14.600 --> 00:14:15.600
But they can't recreate Apple, right?

375
00:14:15.600 --> 00:14:17.760
And so like a brand in and of itself would be something that's valuable.

376
00:14:17.760 --> 00:14:23.600
And so when they're thinking about that, like, you know, values of businesses are so murky,

377
00:14:23.600 --> 00:14:24.600
right?

378
00:14:24.600 --> 00:14:25.600
I always amorphous.

379
00:14:25.600 --> 00:14:26.600
But they're so, they're so variable.

380
00:14:26.600 --> 00:14:27.600
I like the word.

381
00:14:27.600 --> 00:14:28.600
Yeah.

382
00:14:28.600 --> 00:14:29.600
Amorphism.

383
00:14:29.600 --> 00:14:30.600
I'm adding that into my vocabulary.

384
00:14:31.600 --> 00:14:32.800
They're a moving target.

385
00:14:32.800 --> 00:14:35.240
You know, it also depends on the capital environment.

386
00:14:35.240 --> 00:14:38.760
So if you can borrow money at a cheaper rate, values of companies go up, same like real estate,

387
00:14:38.760 --> 00:14:41.840
because if you can get money cheaper, in general, the whole market starts trading higher.

388
00:14:41.840 --> 00:14:45.680
If it's money more expensive than the company's trade lower.

389
00:14:45.680 --> 00:14:48.360
And so there's just, there's a ton of different variables that go into it.

390
00:14:48.360 --> 00:14:51.240
And then also what the company is going to get from the acquirer.

391
00:14:51.240 --> 00:14:56.800
So like if a strategic buyer, so a company, so to define that, if a company buys another

392
00:14:56.800 --> 00:15:01.440
company and the company that bought it would directly benefit from adding that company

393
00:15:01.440 --> 00:15:06.360
to its kind of portfolio, like it can cross sell its existing customers into those services

394
00:15:06.360 --> 00:15:11.200
or products, then that company will make more from the acquisition than what a financial

395
00:15:11.200 --> 00:15:12.200
buyer would be.

396
00:15:12.200 --> 00:15:16.000
So like if a family office, a rich, you know, rich guy just wants to buy a piece of a business

397
00:15:16.000 --> 00:15:18.880
or the whole business, he doesn't have any strategic plays.

398
00:15:18.880 --> 00:15:20.920
He's just going to buy it for what it is.

399
00:15:20.920 --> 00:15:24.840
And so like financial buyers tend to buy businesses for less than strategic buyers do.

400
00:15:25.320 --> 00:15:28.640
So you want to find a strategic buyer if you can, but those deals take longer.

401
00:15:28.640 --> 00:15:29.320
There's more integration.

402
00:15:29.320 --> 00:15:32.400
There's typically, you know, a one or two year consult back period where the founder has

403
00:15:32.400 --> 00:15:34.160
to like make sure it fully, you know, transitions.

404
00:15:34.160 --> 00:15:39.000
There's probably some sort of burnout or kickers along with how well it does with that transition

405
00:15:39.000 --> 00:15:42.000
because some of the value, the enterprise value that gets described is based on how much

406
00:15:42.000 --> 00:15:44.640
more money work together going to be able to make.

407
00:15:44.640 --> 00:15:49.120
And so there's a lot of factors that go into how you value business.

408
00:15:49.120 --> 00:15:52.200
But at the end of the day, it's just what someone is willing to pay.

409
00:15:52.200 --> 00:15:53.200
That's true.

410
00:15:53.200 --> 00:15:55.080
Like it's kind of what someone goes to sell anything.

411
00:15:55.080 --> 00:15:57.680
It's like, it's worth this much, like it's only worth as much as someone's willing

412
00:15:57.680 --> 00:15:58.680
to pay for it.

413
00:15:58.680 --> 00:16:03.080
It's like if you ever $50,000 a lot, sure, you think someone's going to buy it, but no

414
00:16:03.080 --> 00:16:04.080
one wants to pay $50,000.

415
00:16:04.080 --> 00:16:05.080
It's not worth $50,000.

416
00:16:05.080 --> 00:16:09.640
If you sell in 2009 versus 2021, same business, you get a different number.

417
00:16:09.640 --> 00:16:10.640
Yeah.

418
00:16:10.640 --> 00:16:14.680
You know, I didn't really mean to go super balls deep on acquisitions and whatnot, but

419
00:16:14.680 --> 00:16:21.880
something else is a lot of people get caught up in raising money, a lot of businesses.

420
00:16:21.880 --> 00:16:26.600
What is your take on the people who either are super prideful that they've never taken

421
00:16:26.600 --> 00:16:33.480
money and they're super casual, positive, and they're, I guess, a slower grower, right?

422
00:16:33.480 --> 00:16:38.520
Versus someone who's, I want to raise tons of money, dilute myself or my company because

423
00:16:38.520 --> 00:16:39.520
of this big exit.

424
00:16:39.520 --> 00:16:42.480
I mean, there's, I guess there's strategies to both totally.

425
00:16:42.480 --> 00:16:47.160
So I think there's a right way and a wrong way to use to raise money.

426
00:16:47.160 --> 00:16:52.760
The right way of raising money is that you have all the base business economics correct.

427
00:16:52.760 --> 00:16:55.000
So I'll give you an example.

428
00:16:55.000 --> 00:17:01.000
So let's say you have a product or a software that costs a hundred bucks a month, right?

429
00:17:01.000 --> 00:17:08.000
And somebody stays on average for 40 months, so it's a $4,000 LTV, but it costs you, let's

430
00:17:08.000 --> 00:17:11.160
say, $500 to get that customer.

431
00:17:11.160 --> 00:17:15.360
Well, that would mean that the business is going to lose money for the first five months

432
00:17:15.360 --> 00:17:19.320
before they even break even on gross margin, like let alone run all the rest of the business

433
00:17:19.320 --> 00:17:21.120
just on spending to acquire.

434
00:17:21.120 --> 00:17:23.880
It takes them five months to break even and then they'll make their first, quote, dollar

435
00:17:23.880 --> 00:17:27.760
of gross profit that they can start paying payroll and other stuff in.

436
00:17:27.760 --> 00:17:33.600
In that instance, it makes sense for them to raise money to more rapidly acquire customers

437
00:17:33.600 --> 00:17:36.720
because the fundamental economics of the business makes sense where it doesn't make

438
00:17:36.720 --> 00:17:40.440
sense is where people will raise money to cover the fact that they're not making money

439
00:17:40.440 --> 00:17:42.720
so they can artificially lower prices.

440
00:17:43.120 --> 00:17:48.240
This is kind of the issue that Uber ran into or is running into is that the model is different

441
00:17:48.240 --> 00:17:51.840
because if the whole concept was we're going to lower the price, gain a lot of market

442
00:17:51.840 --> 00:17:53.440
share and then we'll raise the price.

443
00:17:53.440 --> 00:17:58.440
But in a very real way, the price was a big part of why people wanted to use it.

444
00:17:58.440 --> 00:18:03.160
If cabs are cheaper than Uber, then all of a sudden the entire fact that you had this

445
00:18:03.160 --> 00:18:05.720
market share only it was price dependent.

446
00:18:05.720 --> 00:18:10.800
And so that's where it's the tricky balance of are we using this money to speed up an

447
00:18:10.800 --> 00:18:14.440
acquisition cycle where we have the LTV to CAC metrics that this makes sense and we

448
00:18:14.440 --> 00:18:18.800
just need to do more of it faster to get a certain size.

449
00:18:18.800 --> 00:18:21.240
The other instance is when you're trying to gain market share but doing it the right

450
00:18:21.240 --> 00:18:26.640
way rather than necessarily this Uber example I was giving.

451
00:18:26.640 --> 00:18:32.240
The third piece with raising money is that you get insane valuations and so because like

452
00:18:32.240 --> 00:18:38.080
if I want to sell 0.1% of acquisition.com, if I said I was going to do that and I posted

453
00:18:38.080 --> 00:18:41.880
it on my Instagram and for some reason the SEC said yes you can be a regulation A and

454
00:18:41.880 --> 00:18:44.520
I went through all the hoops to do a public offering.

455
00:18:44.520 --> 00:18:49.800
I could probably get a billion dollar valuation for acquisition.com today because I sold

456
00:18:49.800 --> 00:18:53.160
so little and so many people wanted a piece and they're just betting on my brand that

457
00:18:53.160 --> 00:18:55.800
it's going to be worth that in the future which is fundamentally what it is because you

458
00:18:55.800 --> 00:18:56.800
just have to do the math.

459
00:18:56.800 --> 00:19:01.680
It's like if I sold 0.1% at $10 million then I would have a billion dollar company.

460
00:19:01.680 --> 00:19:05.320
So I think I could get $10 million from my audience right now to invest in acquisition.com

461
00:19:05.400 --> 00:19:10.200
as I'd 0.1% probably because also because most people aren't sophisticated, whatever

462
00:19:10.200 --> 00:19:11.200
it doesn't matter.

463
00:19:11.200 --> 00:19:17.840
Point is is that if you do it that way at some point someone gets host unless the company

464
00:19:17.840 --> 00:19:24.520
really does grow to a business that would in based on its actual profit be worth a billion

465
00:19:24.520 --> 00:19:25.520
dollars.

466
00:19:25.520 --> 00:19:31.080
So theoretically I could raise that money and then I would grow into my valuation and

467
00:19:31.080 --> 00:19:36.560
have let's say $100 million in EBITDA or for people who know that is just fancy word

468
00:19:36.560 --> 00:19:37.560
for profit.

469
00:19:37.560 --> 00:19:40.720
Just leave it at that five years from now.

470
00:19:40.720 --> 00:19:44.640
But the problem is if my sales and my net profit goes up people are going to bet that it's

471
00:19:44.640 --> 00:19:46.800
actually worth 10 billion because they think it's going to keep going.

472
00:19:46.800 --> 00:19:54.600
So that's the game and normally those fundraising rounds kind of results in when there is the

473
00:19:54.600 --> 00:19:57.720
IPO for that company the people who get host is the general public.

474
00:19:57.720 --> 00:20:01.440
That's the retail investor who basically does the catch up for all the investors they

475
00:20:01.440 --> 00:20:06.280
basically take out of their wallet for those people to be made whole but now they have

476
00:20:06.280 --> 00:20:07.920
to grow into that valuation.

477
00:20:07.920 --> 00:20:11.320
And so those are kind of like some of the things thinking about with the right and wrong

478
00:20:11.320 --> 00:20:13.160
ways of doing it, et cetera.

479
00:20:13.160 --> 00:20:19.880
I have always been a no outside money guy and I do that because I think you approach business

480
00:20:19.880 --> 00:20:22.760
a little differently because I think a lot of times people will raise money because it's

481
00:20:22.760 --> 00:20:23.760
an option.

482
00:20:23.760 --> 00:20:26.480
And so I believe constraint drives innovation.

483
00:20:26.480 --> 00:20:30.960
And so I would rather say, okay, let's say that that $500 to $4,000 example.

484
00:20:30.960 --> 00:20:34.760
It's like, okay, we've got whatever that is an eight to one LTV to CAC ratio.

485
00:20:34.760 --> 00:20:35.760
Great.

486
00:20:35.760 --> 00:20:39.520
So as you don't know what that means, lifetime value of the customer compared to how much

487
00:20:39.520 --> 00:20:41.040
it cost to acquire them.

488
00:20:41.040 --> 00:20:44.520
So you want a good CAC ratio and LTV to CAC, yeah.

489
00:20:44.520 --> 00:20:51.680
And so if we have that, if we have that eight to one ratio, right, I would think, okay,

490
00:20:51.680 --> 00:20:56.560
if it costs $500, is there a way that I can say, can I add an onboarding fee or can I

491
00:20:56.560 --> 00:21:01.680
add a sign-up fee or can I add some sort of front-end value add product or service that

492
00:21:01.680 --> 00:21:06.840
can liquidate my acquisition cost so that I can be net zero on day one or day 30 where

493
00:21:06.840 --> 00:21:10.440
I can get a short-term credit line to acquire the customer that's revolving rather than

494
00:21:10.440 --> 00:21:12.000
dilute myself in equity.

495
00:21:12.000 --> 00:21:17.040
And so I think it's like, I like trying to solve the problem rather than saying, cool,

496
00:21:17.040 --> 00:21:18.040
that's the equation.

497
00:21:18.040 --> 00:21:19.560
Let's go.

498
00:21:19.560 --> 00:21:23.640
I just, I have a fundamental belief about the world that like, if you ask the right questions,

499
00:21:23.640 --> 00:21:24.640
you can solve the problem.

500
00:21:24.640 --> 00:21:27.680
And so that's why I don't, I don't raise.

501
00:21:27.680 --> 00:21:30.760
And I just believe that we can thought, if we're, if we're creative enough, we can figure

502
00:21:30.760 --> 00:21:32.400
out a way to make it grow profitably.

503
00:21:32.400 --> 00:21:37.600
Hey, Mosin Asian, quick break just to let you know that we've been starting to post

504
00:21:37.600 --> 00:21:39.640
on LinkedIn and want to connect with you.

505
00:21:39.640 --> 00:21:40.640
All right.

506
00:21:40.640 --> 00:21:43.120
So send me a connection request and note letting me know that you listened to the show and

507
00:21:43.120 --> 00:21:44.120
I will accept it.

508
00:21:44.120 --> 00:21:47.480
There's anyone you think that we should be connected with, tag them in one of my or

509
00:21:47.480 --> 00:21:50.600
Lailess posts and I will give you all the love in the world.

510
00:21:50.600 --> 00:21:51.600
All right.

511
00:21:51.600 --> 00:21:54.680
So let's get back to the show.

512
00:21:54.680 --> 00:21:59.960
I guess is do people ever give you of like, you don't, you're not about raising money,

513
00:21:59.960 --> 00:22:04.240
but your company is about, you want people to want to raise money.

514
00:22:04.240 --> 00:22:08.640
It's not really, most of the times they're not raising money, like not in the formal sense,

515
00:22:08.640 --> 00:22:13.520
because most of the times the, I mean, more than half of the deals we have, we put no

516
00:22:13.520 --> 00:22:14.520
money in.

517
00:22:14.520 --> 00:22:16.120
Because we're like, strategic.

518
00:22:16.120 --> 00:22:17.120
Yeah.

519
00:22:17.120 --> 00:22:18.120
Exactly.

520
00:22:18.120 --> 00:22:19.440
So that's kind of what I was saying earlier with the strategic partner.

521
00:22:19.440 --> 00:22:23.960
It's like, well, if I can 10 extra business, then what is that worth to you?

522
00:22:23.960 --> 00:22:28.480
Is it worth, you know, giving up a third to have a 10 times bigger thing?

523
00:22:28.480 --> 00:22:31.080
So you are now seven times wealthier than you were at the beginning.

524
00:22:31.080 --> 00:22:32.080
Everybody wins.

525
00:22:32.080 --> 00:22:33.560
I'm a big like expand the pie guy.

526
00:22:33.560 --> 00:22:37.280
Do you think a lot of people assume there's some sort of number that every business has

527
00:22:37.280 --> 00:22:40.720
to get to before, like let's say people are building a business to get acquired?

528
00:22:40.720 --> 00:22:44.400
Is it, do you think like, hey, I need to get to 10 million, hey, I need to get 50 million,

529
00:22:44.400 --> 00:22:49.920
to get to 100 or like, what is your perspective on how companies view like, I want to see this

530
00:22:49.920 --> 00:22:55.880
company have successfully need to get to this certain number or I want to, I see the trajectory

531
00:22:55.880 --> 00:22:56.880
that I could be on.

532
00:22:56.880 --> 00:23:02.520
I want to acquire it before it gets so big that they're, that their value is significantly

533
00:23:02.520 --> 00:23:03.520
higher.

534
00:23:03.520 --> 00:23:05.680
Like, what do you, how do you think people from whose perspective?

535
00:23:05.680 --> 00:23:06.680
I guess both.

536
00:23:06.680 --> 00:23:11.000
Like, of a business owner, like how much money do I need to build it to, or is it just

537
00:23:11.000 --> 00:23:15.000
like, just build a great company and worry less about how fast you're going to get to 100

538
00:23:15.000 --> 00:23:16.320
million, we call it.

539
00:23:16.320 --> 00:23:20.200
And from a business perspective, like, how do you think that they analyze businesses

540
00:23:20.200 --> 00:23:21.200
to acquire?

541
00:23:21.200 --> 00:23:22.200
Yeah.

542
00:23:22.200 --> 00:23:23.200
So I'll start with the founder one.

543
00:23:23.200 --> 00:23:26.320
So founder wise, you know, I would say that the big thing that we always try and find

544
00:23:26.320 --> 00:23:28.120
is missionaries, not mercenaries.

545
00:23:28.120 --> 00:23:30.920
And so it's people who are really passionate about the cause because somebody who's passionate

546
00:23:30.920 --> 00:23:33.720
about the cause will always build a bigger company because they're doing it for the

547
00:23:33.720 --> 00:23:35.280
reason for a different reason.

548
00:23:35.280 --> 00:23:37.360
And so it's like the person who loves walking walks further than the person who loves

549
00:23:37.360 --> 00:23:38.360
the destination.

550
00:23:38.360 --> 00:23:40.760
And so when people are trying to build a business in order to sell it, they tend to just have

551
00:23:40.760 --> 00:23:42.040
a different energy about going.

552
00:23:42.040 --> 00:23:43.040
It's everything.

553
00:23:43.040 --> 00:23:44.040
It's just inherently a shorter.

554
00:23:44.040 --> 00:23:45.040
Yeah.

555
00:23:45.040 --> 00:23:46.040
Right?

556
00:23:46.040 --> 00:23:47.360
But if you have an unlimited time horizon, then there is no such thing as a rush and you

557
00:23:47.360 --> 00:23:49.520
can make the right calls for the long, right?

558
00:23:49.520 --> 00:23:52.240
And that's what we really want because you'll get the highest returns with somebody you

559
00:23:52.240 --> 00:23:53.960
can think five, 10 years out.

560
00:23:53.960 --> 00:23:55.880
But it just won't make sense for one year or two years.

561
00:23:55.880 --> 00:23:59.000
But like, they can make a huge move that's going to make it worth a ton.

562
00:23:59.000 --> 00:24:02.320
But if they're always obsessed about like, that's why public companies, it's like quarterly

563
00:24:02.320 --> 00:24:05.320
earnings calls, like they have to think short term because CEOs are incentivized, blah,

564
00:24:05.320 --> 00:24:06.320
blah, blah.

565
00:24:06.320 --> 00:24:07.320
I won't even get into that.

566
00:24:08.320 --> 00:24:10.280
We prefer long term thinkers.

567
00:24:10.280 --> 00:24:16.280
In terms of them getting acquired, I think the line is just at what point do you get institutional

568
00:24:16.280 --> 00:24:17.280
money?

569
00:24:17.280 --> 00:24:19.920
So institutional money would be like private equity money and up.

570
00:24:19.920 --> 00:24:25.600
And normally that doesn't really happen below 10 million in sales most of the time.

571
00:24:25.600 --> 00:24:28.000
I'm excluding tech for like seed and VC and all that.

572
00:24:28.000 --> 00:24:30.520
It's just a different game than like what I would consider traditional business, which

573
00:24:30.520 --> 00:24:36.920
is what we're in, which is there's a lot of caveats in this.

574
00:24:36.920 --> 00:24:39.640
Like with what I was saying earlier with fundraising, that tends to happen more in tech

575
00:24:39.640 --> 00:24:40.640
companies.

576
00:24:40.640 --> 00:24:41.640
You know what I mean?

577
00:24:41.640 --> 00:24:45.680
And sometimes like open AI raised a ton of money to build artificial intelligence.

578
00:24:45.680 --> 00:24:46.680
Did that make sense?

579
00:24:46.680 --> 00:24:47.680
Absolutely.

580
00:24:47.680 --> 00:24:49.680
Did they have any way of making money until it started to work?

581
00:24:49.680 --> 00:24:51.180
No.

582
00:24:51.180 --> 00:24:52.180
Still made sense.

583
00:24:52.180 --> 00:24:53.180
You know what I mean?

584
00:24:53.180 --> 00:24:56.200
So it's like, it's trying to keep it within context.

585
00:24:56.200 --> 00:24:59.080
Most businesses that are what I consider normal businesses that don't have a million

586
00:24:59.080 --> 00:25:05.320
X possibility oftentimes can solve their problems if they just think about it a little bit harder.

587
00:25:05.320 --> 00:25:06.640
But back to the founder.

588
00:25:06.640 --> 00:25:10.560
So founder with institutional, usually 10 million in top line sales is minimum that they're

589
00:25:10.560 --> 00:25:16.120
going to really be interested in, you know, a million in EBITDA maybe, but like if I'm

590
00:25:16.120 --> 00:25:19.760
going to go to market, I don't really want to take anything to market below five, like

591
00:25:19.760 --> 00:25:21.640
an EBITDA in profit per year.

592
00:25:21.640 --> 00:25:24.640
That's because that's when you can get what I would consider real money.

593
00:25:24.640 --> 00:25:25.640
You know what I mean?

594
00:25:25.640 --> 00:25:30.640
You know, you can get a 50, you can get 100 like that's a meaningful enough size.

595
00:25:30.640 --> 00:25:34.640
And it's like if you've got to 10 or if you're at seven million and you've got one and

596
00:25:34.640 --> 00:25:39.200
a half million profits like, dude, we just, let's just, let's just get to 20 and have

597
00:25:39.200 --> 00:25:40.200
five.

598
00:25:40.200 --> 00:25:43.320
And now this is a company that becomes very acquirable.

599
00:25:43.320 --> 00:25:44.320
Okay.

600
00:25:44.320 --> 00:25:49.200
And a bigger multiple with, you know, you're talking about all these different like acquisitions

601
00:25:49.200 --> 00:25:53.160
things and how you're saying, you know, you could raise money from your, your audience.

602
00:25:53.160 --> 00:25:57.160
Speaking of your audience, how did you get so popular on the internet?

603
00:25:57.160 --> 00:25:59.520
And why aren't you verified on Instagram?

604
00:25:59.520 --> 00:26:01.320
Are you pissed about that?

605
00:26:01.320 --> 00:26:03.960
Um, I mean, you know, you got to be a little pissed.

606
00:26:03.960 --> 00:26:06.240
He's like, you know, help a brother out.

607
00:26:06.240 --> 00:26:10.280
No, I actually feel bad about it because there's like a hundred zillion like fake orthodoxy

608
00:26:10.280 --> 00:26:13.160
accounts that are like, hey, invest in my thing and so all these people get like scam

609
00:26:13.160 --> 00:26:14.160
for it.

610
00:26:14.160 --> 00:26:15.160
And then I'll get a mess.

611
00:26:15.160 --> 00:26:16.160
Just like, dude, you took my hundred dollars.

612
00:26:16.160 --> 00:26:17.960
I get, I get to call my YouTube videos.

613
00:26:17.960 --> 00:26:23.160
They'll get like a, hey, congrats WhatsApp sent me 20 bucks and I'll send you a PlayStation

614
00:26:23.160 --> 00:26:24.160
five.

615
00:26:24.160 --> 00:26:25.160
And people DM me like, is this you?

616
00:26:25.160 --> 00:26:26.160
I'm like, guys.

617
00:26:26.160 --> 00:26:27.160
Yeah.

618
00:26:27.160 --> 00:26:28.160
Like, what do you come on?

619
00:26:28.160 --> 00:26:29.160
Yeah.

620
00:26:29.160 --> 00:26:30.360
I said, if you have to ask, you already know.

621
00:26:30.360 --> 00:26:33.040
So anyways.

622
00:26:33.040 --> 00:26:35.400
In terms of the, the rise, a lot of it was because of the team.

623
00:26:35.400 --> 00:26:39.120
So I mean, the team that's off the side here that you can't see got Caleb, got Quinn,

624
00:26:39.120 --> 00:26:45.920
got the boys with a Z who really, who really packaged me, you know, me well and make me

625
00:26:45.920 --> 00:26:47.640
look cooler than I am.

626
00:26:47.640 --> 00:26:49.320
And so that's my goal every day.

627
00:26:49.320 --> 00:26:50.920
It's me too.

628
00:26:50.920 --> 00:26:53.600
And so it's really just, you know, applying the same things that we did with business just

629
00:26:53.600 --> 00:26:54.600
to kind of media.

630
00:26:54.600 --> 00:26:55.600
And media is very new to us.

631
00:26:55.600 --> 00:26:59.320
I mean, we've really only been doing it hard for, I would say a year.

632
00:26:59.320 --> 00:27:00.640
We started doing it in general.

633
00:27:00.640 --> 00:27:05.480
Like I started posting like two or three YouTube videos a week of just me like screen recording

634
00:27:05.480 --> 00:27:06.480
myself.

635
00:27:06.480 --> 00:27:07.480
Yeah.

636
00:27:07.480 --> 00:27:08.800
I think in September of 20.

637
00:27:08.800 --> 00:27:12.280
So it's been twoish years right now.

638
00:27:12.280 --> 00:27:16.320
And so, but anyways, taking it more seriously and actually doing like shorts and stuff, we

639
00:27:16.320 --> 00:27:19.440
did about it a year and change ago is when we started doing that stuff and that started

640
00:27:19.440 --> 00:27:20.440
growing.

641
00:27:20.440 --> 00:27:21.880
I think a lot of it is because there wasn't a lot of people doing it.

642
00:27:21.880 --> 00:27:23.520
We got into the right time.

643
00:27:23.520 --> 00:27:24.520
Yeah.

644
00:27:24.520 --> 00:27:26.320
We've been, we've been very lucky in a lot of things like that.

645
00:27:26.320 --> 00:27:30.040
I got into Facebook advertising in 2013, you know, with, with the gyms and the fitness

646
00:27:30.040 --> 00:27:31.040
businesses.

647
00:27:31.040 --> 00:27:32.040
So like, I was super early on that.

648
00:27:32.040 --> 00:27:35.280
I've just, I've had a lot of things that just like it worked out that I got it early.

649
00:27:35.280 --> 00:27:36.680
And we got a disproportionate return.

650
00:27:36.680 --> 00:27:40.880
But I mean, honestly, I think if I were to give you a real answer, I, I don't know.

651
00:27:40.880 --> 00:27:44.760
You know, I think, I think there's a little bit of a vacuum for what I would consider

652
00:27:44.760 --> 00:27:49.520
real business education because most of the people that are teaching business don't

653
00:27:49.520 --> 00:27:53.160
have very big businesses and people with very big businesses don't make content.

654
00:27:53.160 --> 00:27:56.280
And I think that's, so I think it's just, it's a crisscross of the fact that we've got

655
00:27:56.280 --> 00:28:01.480
those two things, which is a, a very understandable story of legitimacy.

656
00:28:01.480 --> 00:28:06.880
And then the, the quote advice, you know, that we, that I, you know, put out there is,

657
00:28:06.880 --> 00:28:10.480
um, it's stuff that people actually, I get deems all the time, they're like, dude, I ran

658
00:28:10.480 --> 00:28:11.480
that promotion.

659
00:28:11.480 --> 00:28:12.480
They used that.

660
00:28:12.480 --> 00:28:16.120
I just made 50 grand, like all the time, like, dude, I, I changed your sales process and

661
00:28:16.120 --> 00:28:17.760
we tripled our sales.

662
00:28:17.760 --> 00:28:20.880
So people are actually using it, seeing the result and then they become true believers

663
00:28:20.880 --> 00:28:23.600
because they're like, dude, this is better than all the stuff I've paid for.

664
00:28:23.600 --> 00:28:24.600
And that's the goal.

665
00:28:25.120 --> 00:28:30.200
Again, like my selfish intent here is that there's a kid who's 20 right now, consumes

666
00:28:30.200 --> 00:28:31.000
all my stuff.

667
00:28:31.000 --> 00:28:33.760
And in four years is doing 10 million years.

668
00:28:33.760 --> 00:28:35.600
Like, dude, you've been on my vision board.

669
00:28:35.600 --> 00:28:37.600
I want acquisition.com as a partner.

670
00:28:37.600 --> 00:28:38.520
Let's make it happen.

671
00:28:38.520 --> 00:28:39.680
Like that's why I do it.

672
00:28:39.680 --> 00:28:40.680
But it's a long game.

673
00:28:40.680 --> 00:28:45.760
Was it, uh, you know, although you have a similar beard, slightly almost as jacked as

674
00:28:45.760 --> 00:28:49.080
liver king, you know, he had a strategy of like, I'm going to become popular on the

675
00:28:49.080 --> 00:28:50.080
internet.

676
00:28:50.080 --> 00:28:51.080
Like it came out, right?

677
00:28:51.080 --> 00:28:52.080
Well, I'm 50 pounds heavier than the liver king.

678
00:28:52.080 --> 00:28:53.080
Are you?

679
00:28:53.080 --> 00:28:54.080
Yeah.

680
00:28:54.080 --> 00:28:59.560
Like, let the record show, um, and you don't need testicles, man.

681
00:28:59.560 --> 00:29:00.560
Yeah.

682
00:29:00.560 --> 00:29:01.560
All free.

683
00:29:01.560 --> 00:29:02.560
Since I'm free.

684
00:29:02.560 --> 00:29:10.080
Well, there was that one time when I went to Omnia, um, would, uh, like was, was there

685
00:29:10.080 --> 00:29:14.320
a point when you were like, I want to become, I want to become a thing on the internet

686
00:29:14.320 --> 00:29:16.320
because you said it was like two years, like 100%.

687
00:29:16.320 --> 00:29:17.320
Yeah.

688
00:29:17.320 --> 00:29:18.320
Yeah.

689
00:29:18.320 --> 00:29:20.520
So, uh, it was actually, it was like a series of, so I'll give you the, I'll give you

690
00:29:20.520 --> 00:29:25.040
the long, real answer, which was I really wanted to be rich in anonymous.

691
00:29:25.040 --> 00:29:29.840
And there's like one video that Caleb was found of me being like, fuck content, like

692
00:29:29.840 --> 00:29:30.840
all the stuff stupid.

693
00:29:30.840 --> 00:29:32.680
Like I just would be rich and have no one bother me.

694
00:29:32.680 --> 00:29:33.680
Yeah.

695
00:29:33.680 --> 00:29:34.680
And I did that for a really long time.

696
00:29:34.680 --> 00:29:38.440
And then what happened was like the thing that was like the first big crack is like anybody

697
00:29:38.440 --> 00:29:42.240
who's listening to these new things is ridiculous, but when Kylie Jenner hit the front of Forbes

698
00:29:42.240 --> 00:29:46.840
and she was like 20 and a billionaire, I honestly, I was like depressed for a day.

699
00:29:46.840 --> 00:29:49.360
Like I really was like, I think the world was depressed.

700
00:29:49.360 --> 00:29:50.360
I was like, why do I suck?

701
00:29:50.360 --> 00:29:51.360
Yeah.

702
00:29:51.360 --> 00:29:52.360
Like why am I insufficient?

703
00:29:52.360 --> 00:29:53.360
But I was like, you know what?

704
00:29:53.360 --> 00:29:54.560
Kris Jenner organized her whole life.

705
00:29:54.560 --> 00:29:57.200
Kris Jenner's the G, she's the one who's really all like, she's just a figurehead for like

706
00:29:57.200 --> 00:29:58.200
Chris's empire.

707
00:29:58.200 --> 00:29:59.600
She's also more attractive than you.

708
00:29:59.600 --> 00:30:00.600
Oh.

709
00:30:00.600 --> 00:30:01.600
Yeah.

710
00:30:01.600 --> 00:30:02.600
Right.

711
00:30:02.600 --> 00:30:03.600
Fight.

712
00:30:03.600 --> 00:30:04.600
If I had her, but I wouldn't even be here.

713
00:30:04.600 --> 00:30:05.600
Right.

714
00:30:05.600 --> 00:30:06.600
Um, anyways.

715
00:30:06.600 --> 00:30:07.600
So that happened.

716
00:30:07.600 --> 00:30:09.800
But I like, you know, my ego was like, no, it's just Chris and they was organized.

717
00:30:09.800 --> 00:30:10.800
Okay.

718
00:30:10.800 --> 00:30:11.800
Cool.

719
00:30:11.800 --> 00:30:15.360
And then Conor McGregor came out with, uh, proper 12 and it was like, boom, 600

720
00:30:15.360 --> 00:30:16.360
million.

721
00:30:16.360 --> 00:30:17.360
I was like, shit.

722
00:30:17.360 --> 00:30:18.360
He did 600 million with that.

723
00:30:18.360 --> 00:30:19.360
Oh.

724
00:30:19.360 --> 00:30:22.400
Um, and then, and then who to beauty?

725
00:30:22.400 --> 00:30:26.640
She sold a portion of her company for at 600 million, just a YouTuber and an Instagram.

726
00:30:26.640 --> 00:30:27.640
I don't know.

727
00:30:27.640 --> 00:30:28.640
I know.

728
00:30:28.640 --> 00:30:32.720
And then, uh, and then again, I was like, this is like, this is starting to become a theme.

729
00:30:32.720 --> 00:30:36.520
And then the rock had taramana and then now there were like two to four billion.

730
00:30:36.520 --> 00:30:40.800
And so this just again, it was like these chinks in my armor of like, you know, all this

731
00:30:40.800 --> 00:30:41.800
fame stuff stupid.

732
00:30:41.800 --> 00:30:42.800
Like, why would you want to be famous?

733
00:30:42.800 --> 00:30:43.800
She's been involved.

734
00:30:43.880 --> 00:30:46.480
And so, um, finally, I was at a buddy in my house.

735
00:30:46.480 --> 00:30:49.120
He's, he's very famous, um, who is he?

736
00:30:49.120 --> 00:30:50.640
And I don't want to name drop him.

737
00:30:50.640 --> 00:30:51.640
He's very famous.

738
00:30:51.640 --> 00:30:54.680
Well, I just, you know, I don't want to, yeah, I don't want to blow him up.

739
00:30:54.680 --> 00:30:55.680
Um, it's right.

740
00:30:55.680 --> 00:30:56.680
And it's Barack Obama.

741
00:30:56.680 --> 00:30:57.680
Yeah.

742
00:30:57.680 --> 00:30:58.680
Yeah.

743
00:30:58.680 --> 00:30:59.680
His front's gone bar.

744
00:30:59.680 --> 00:31:04.320
Um, and so anyways, uh, so I was there and he's like, and I was like, don't you get tired

745
00:31:04.320 --> 00:31:08.680
of like the weird messages and like letters at your door and people dropping off, like

746
00:31:08.680 --> 00:31:12.240
threatening your family and kids and stuff like, isn't that like, I was like, that sounds

747
00:31:12.240 --> 00:31:13.240
horrible.

748
00:31:13.400 --> 00:31:16.760
And he said, if that's the price I have to pay for the impact I want to have, I'd make

749
00:31:16.760 --> 00:31:17.840
that trade every day of the week.

750
00:31:18.080 --> 00:31:20.480
And I just like, it just like stabbed me.

751
00:31:21.160 --> 00:31:24.600
And I was like, here I am saying that I like want to help people out and make products

752
00:31:24.600 --> 00:31:26.400
and services that, you know, surf communities and whatnot.

753
00:31:26.400 --> 00:31:29.120
And I was like, and I'm just too much of a pussy to like get out there.

754
00:31:29.120 --> 00:31:31.960
You're doing a disservice by not producing content.

755
00:31:31.960 --> 00:31:32.480
Right.

756
00:31:32.480 --> 00:31:34.240
And that's exactly that, that was like that.

757
00:31:34.240 --> 00:31:36.680
And so after that point, I was like, all right, we're doing it.

758
00:31:36.720 --> 00:31:41.680
And so, you know, I, I, I got a couple of vendors to, to new different platforms.

759
00:31:41.880 --> 00:31:42.880
Cause I just started with agency.

760
00:31:42.880 --> 00:31:43.840
So I was like, I don't know what I'm doing.

761
00:31:44.080 --> 00:31:46.320
And they were like, just send us three videos a week.

762
00:31:46.320 --> 00:31:48.200
I was like, OK, and then that was what started it.

763
00:31:48.200 --> 00:31:51.280
And then, you know, we started recruiting, bring people in house and now, you know,

764
00:31:51.280 --> 00:31:52.920
our house teams bigger than our vendor team.

765
00:31:54.400 --> 00:31:56.680
But yeah, so we just start, you know, just start to pull in the thread and start

766
00:31:56.680 --> 00:31:59.680
getting a little bit better and just try to add new platforms, you know, every, every

767
00:31:59.680 --> 00:32:01.800
few months and learn how this whole game works.

768
00:32:01.800 --> 00:32:03.320
And there's a strategy to become popular.

769
00:32:03.320 --> 00:32:03.840
They didn't.

770
00:32:03.960 --> 00:32:04.240
Yeah.

771
00:32:04.240 --> 00:32:05.120
More good content.

772
00:32:05.960 --> 00:32:07.480
I've been doing it wrong for like 10 years, man.

773
00:32:09.040 --> 00:32:09.320
Yeah.

774
00:32:09.320 --> 00:32:11.560
No, it's like, actually, so for anybody,

775
00:32:11.640 --> 00:32:14.040
is trying to do this, it's quantity first.

776
00:32:14.200 --> 00:32:17.520
So you just have to put out a lot of stuff and you do a lot of stuff, not because

777
00:32:17.520 --> 00:32:19.320
you're going to get a lot of reach from it, but because you don't know what you're

778
00:32:19.320 --> 00:32:19.640
doing.

779
00:32:20.000 --> 00:32:21.840
And so it tells you, it gives you two things.

780
00:32:21.840 --> 00:32:23.600
One is it gives you feedback from the audience because there's going to be some

781
00:32:23.600 --> 00:32:24.560
stuff that does better than others.

782
00:32:24.560 --> 00:32:25.840
And so it's like cool, do more of that.

783
00:32:26.160 --> 00:32:28.080
And then flip side, you'll also start to kind of like learn your voice.

784
00:32:28.080 --> 00:32:31.240
Cause if you listen to some of my older videos, I sound just different.

785
00:32:31.240 --> 00:32:33.880
Just less articulate, you know, whatever, just I wasn't doing this as much.

786
00:32:34.280 --> 00:32:38.800
And so, um, quantity first and then you start to learn how to increase the quality.

787
00:32:38.800 --> 00:32:40.440
That's like doing the more of that good stuff.

788
00:32:40.480 --> 00:32:42.240
So you start to get, you're like, Oh, why did that video do well?

789
00:32:42.240 --> 00:32:44.080
Oh, is that a topic thing or do I have a good hook?

790
00:32:44.080 --> 00:32:47.040
Like what are you start studying the things that are outliers that do a little bit

791
00:32:47.040 --> 00:32:49.280
better and then you really start focusing on quantity.

792
00:32:49.280 --> 00:32:52.120
So quality kind of drops a little bit and then you start quantity kind of drops.

793
00:32:52.120 --> 00:32:55.440
And you just start focusing on like, if I put out one really good video, it

794
00:32:55.440 --> 00:32:57.120
does way better than 10 shitty videos.

795
00:32:57.360 --> 00:32:58.560
And so you're like, I'm going to do more of that.

796
00:32:58.840 --> 00:33:02.880
And I think the third phase is quality quantity where you can put out amazing

797
00:33:02.880 --> 00:33:06.960
videos and then more of them or, you know, whatever your version of content is, podcasts,

798
00:33:06.960 --> 00:33:07.280
etc.

799
00:33:07.680 --> 00:33:10.480
And so that's kind of how I see the, some of the phases playing out.

800
00:33:10.480 --> 00:33:14.200
And so right now we're right at the, I'd say cusp into the condensing down

801
00:33:14.200 --> 00:33:18.520
into more quality because we've just been boom, quantity to learn what the market

802
00:33:18.520 --> 00:33:19.040
wants.

803
00:33:19.200 --> 00:33:22.080
You know, I always want to talk about like LTV to CAC, you know, ratios and like

804
00:33:22.080 --> 00:33:25.440
churn ratios and like just different ways of like onboarding customers to increase

805
00:33:25.440 --> 00:33:27.400
LTV and like no one cares.

806
00:33:28.480 --> 00:33:31.320
So I was like, huh, but I'm like, Hey, I care.

807
00:33:31.360 --> 00:33:32.880
Yeah, it depends on the audience.

808
00:33:32.880 --> 00:33:33.360
You know what I mean?

809
00:33:33.360 --> 00:33:35.480
Um, and so we, we actually alternate content.

810
00:33:35.480 --> 00:33:36.880
I mean, we're going into it.

811
00:33:37.160 --> 00:33:39.960
So we'll alternate content where it's like, there's, there's top of funnel

812
00:33:39.960 --> 00:33:43.000
content, which is content that we think will just reach a lot of people.

813
00:33:43.280 --> 00:33:46.440
And so that will, like if I make something about Chipotle, which is reference

814
00:33:46.440 --> 00:33:48.160
at the beginning of the show, delicious, right?

815
00:33:48.200 --> 00:33:49.480
It got you, right?

816
00:33:49.480 --> 00:33:52.520
And so you might be, you know, it'll attract everybody, which means the net will

817
00:33:52.520 --> 00:33:55.040
also include bigger business owners because it includes everyone.

818
00:33:55.360 --> 00:33:59.000
But then to earn trust with that person, that's where the track, you know,

819
00:33:59.000 --> 00:34:02.280
the track record, etc, helps like having the, you know, the companies that we

820
00:34:02.280 --> 00:34:03.440
have in the exits and whatnot.

821
00:34:03.800 --> 00:34:08.920
Um, but then we have deep content that doesn't get the same amount of reach as

822
00:34:08.920 --> 00:34:10.120
kind of like the more general content.

823
00:34:10.440 --> 00:34:13.240
But then those people get to have, in my opinion, just like a deeper relationship,

824
00:34:13.280 --> 00:34:14.160
that's my running theory.

825
00:34:14.320 --> 00:34:15.640
I could be completely wrong.

826
00:34:15.640 --> 00:34:19.560
So that's how he's what I got from that is Chipotle is the reason for your success.

827
00:34:19.600 --> 00:34:19.920
Yes.

828
00:34:20.560 --> 00:34:23.280
The common, the common thing among, among the people, yes.

829
00:34:23.560 --> 00:34:26.440
And it's Teresa is delicious.

830
00:34:26.800 --> 00:34:31.680
You made a comment about, uh, like, uh, I don't call them like fake gurus or fake

831
00:34:31.680 --> 00:34:34.640
business people, but I'm sure that was probably frustrating of seeing,

832
00:34:34.840 --> 00:34:38.600
seeing popular people on the internet who you were like, well,

833
00:34:38.600 --> 00:34:39.520
some's not right there.

834
00:34:39.720 --> 00:34:42.240
Do you ever get people that think you're a fake guru?

835
00:34:43.080 --> 00:34:43.600
Yeah.

836
00:34:44.440 --> 00:34:46.320
It doesn't, I don't, I honestly don't think much about it.

837
00:34:46.320 --> 00:34:48.640
Cause I was sure there are people who I was doing a little deep dive.

838
00:34:48.640 --> 00:34:52.280
And first of all, I've learned to never go into Reddit forms just in your life,

839
00:34:52.320 --> 00:34:52.640
right?

840
00:34:52.640 --> 00:34:57.040
Cause the, it's dark side of the internet and some comments that I was seeing,

841
00:34:57.320 --> 00:35:00.840
which, which again is that because I was doing research about you, right?

842
00:35:01.200 --> 00:35:05.240
Is that people were like, there's no way that this man is just giving out

843
00:35:05.240 --> 00:35:06.280
information for free.

844
00:35:06.280 --> 00:35:08.240
There's some ulterior motive, right?

845
00:35:08.480 --> 00:35:11.960
And I think someone said what, you know, some of your, your books are super cheap.

846
00:35:13.000 --> 00:35:16.800
And, and they were like, it's a strategy, which it might be, but like,

847
00:35:17.360 --> 00:35:20.800
what do you say to people who are being like, there's no way he would just give

848
00:35:20.800 --> 00:35:21.600
all this information.

849
00:35:21.760 --> 00:35:23.040
He's trying to suck us for money.

850
00:35:23.160 --> 00:35:24.680
I'm super transparent about my intention.

851
00:35:24.720 --> 00:35:28.240
I'm here to absolutely make money, but I just don't need most people's money.

852
00:35:29.000 --> 00:35:31.840
So if I have one Facebook investment, I make more than I would sell it,

853
00:35:31.880 --> 00:35:36.040
then I would, if I sold coaching and programs and, and courses and all that kind

854
00:35:36.040 --> 00:35:37.000
of stuff, you know what I mean?

855
00:35:37.000 --> 00:35:41.680
I don't need to because like I said, if I make one, you know, like we have 16

856
00:35:41.680 --> 00:35:45.520
companies in the portfolio right now, like most of them, I could probably,

857
00:35:45.520 --> 00:35:48.960
like my equity stake is probably worth, I don't know, five, 10,

858
00:35:49.000 --> 00:35:52.440
age million, just as a conservative medium.

859
00:35:54.240 --> 00:35:56.800
How many, you know, how many thousand dollar courses do I have to sell to do that?

860
00:35:56.880 --> 00:35:57.280
A lot.

861
00:35:57.320 --> 00:35:57.600
Yeah.

862
00:35:58.280 --> 00:36:01.160
And in terms of a brand that I want to build, I don't want to do it.

863
00:36:01.160 --> 00:36:01.760
Everyone else does.

864
00:36:02.480 --> 00:36:04.280
So I want to, you know, I don't want to live their life.

865
00:36:04.280 --> 00:36:08.040
And to be fair, like most of it, like there's a cap to how much money you can

866
00:36:08.040 --> 00:36:09.320
make if that's the game.

867
00:36:09.920 --> 00:36:13.480
Like you can't get in my opinion, you're not going to get like ultra wealthy.

868
00:36:13.800 --> 00:36:16.440
So for me to get to a billion, I'm not going to get their selling courses.

869
00:36:16.960 --> 00:36:17.280
Yeah.

870
00:36:17.280 --> 00:36:20.440
So I have to, I have to own something or stuff that's worth a billion.

871
00:36:20.680 --> 00:36:22.200
And so I have to play the game differently.

872
00:36:22.640 --> 00:36:25.400
So for we were like, you know, he's trying to suck us for money.

873
00:36:25.400 --> 00:36:27.600
I'm probably not trying to suck that person for money because the type of person

874
00:36:27.600 --> 00:36:29.360
that I'm going after understands exactly what I'm doing.

875
00:36:30.360 --> 00:36:31.440
So they have nothing to fear.

876
00:36:32.040 --> 00:36:35.960
But no, I mean, we have, I have books and the reason I had the book, it's 99 cents.

877
00:36:35.960 --> 00:36:36.600
And you know, it's crazy.

878
00:36:36.600 --> 00:36:40.080
I it's like so many people from like Bangladesh and like Pakistan, like people who

879
00:36:40.080 --> 00:36:42.040
really like, they can buy the book and they're like, I get all these

880
00:36:42.040 --> 00:36:43.080
thank you messages, which is cool.

881
00:36:44.880 --> 00:36:47.200
But I also think it's like part of the reason I'm doing this way is because like,

882
00:36:47.200 --> 00:36:51.120
I kind of want to prove a point, which is that you don't have, like you don't

883
00:36:51.120 --> 00:36:52.200
have to play the game the same way.

884
00:36:52.480 --> 00:36:56.200
Like if, and I just have this big belief that if you give the most away in the

885
00:36:56.200 --> 00:36:59.440
marketplace, you get the most over a long enough time horizon, you get the

886
00:36:59.440 --> 00:37:00.040
most back.

887
00:37:00.520 --> 00:37:02.520
And so everyone gets a little bit of goodwill and they try to monitor it.

888
00:37:02.520 --> 00:37:03.920
A little bit of goodwill, they monetize, right?

889
00:37:04.320 --> 00:37:07.840
But if you can just deposit and deposit and deposit and people are like, I don't

890
00:37:07.840 --> 00:37:09.960
know, when is the other, when is the other shoe going to drop?

891
00:37:09.960 --> 00:37:12.520
And then, and then you just keep proving it wrong.

892
00:37:12.760 --> 00:37:16.640
Then that doubt or that person actually ends up becoming your biggest fan.

893
00:37:17.040 --> 00:37:18.520
Like they become your biggest supporter.

894
00:37:18.640 --> 00:37:22.560
I think people just want to assume that everyone has some evil intent or

895
00:37:22.760 --> 00:37:23.560
I'm here to make money.

896
00:37:23.840 --> 00:37:24.880
They're like, I'm very, yeah.

897
00:37:24.880 --> 00:37:28.120
A lot of people, that'd be like saying, like, God, Apple only comes out with new

898
00:37:28.120 --> 00:37:29.400
iPhones to make more money.

899
00:37:29.400 --> 00:37:30.320
It's like, no shit.

900
00:37:30.800 --> 00:37:32.280
Like, of course, yeah.

901
00:37:32.760 --> 00:37:35.680
And like, what do you, what do you think about?

902
00:37:36.160 --> 00:37:41.120
We'll call them fake gurus, like where people that are trying to sell the

903
00:37:41.560 --> 00:37:45.160
people who sell, sell courses about how to build a business, but their only

904
00:37:45.160 --> 00:37:49.160
business experience is making a course about how to build business.

905
00:37:49.200 --> 00:37:49.440
Yeah.

906
00:37:49.440 --> 00:37:52.240
So I think so this is a really,

907
00:37:52.240 --> 00:37:57.960
um, it's an, I have, I have a, I have a lot of thoughts about this, um,

908
00:37:57.960 --> 00:38:01.640
because I, I have really strong views about the formal education system.

909
00:38:02.000 --> 00:38:05.600
I believe that there's the supply and demand of like the demand for income

910
00:38:05.600 --> 00:38:07.480
generating skills will not go away.

911
00:38:07.480 --> 00:38:09.200
That's only going to get more, right?

912
00:38:09.880 --> 00:38:14.440
And the supply of people who could provide those skills in the formal education

913
00:38:14.440 --> 00:38:16.400
system was basically, is basically nothing.

914
00:38:16.720 --> 00:38:22.160
And so they, their poor job, the fact that they never adapted, they skyrocketed

915
00:38:22.160 --> 00:38:24.480
their price, which is subsidized by the government so that no one could

916
00:38:24.480 --> 00:38:28.200
bankrupt themselves out of it, which created these insane intuitions.

917
00:38:28.800 --> 00:38:31.640
And, and no longer provided, because they never changed.

918
00:38:31.640 --> 00:38:34.320
So it's the same education you got 50 years ago, but the market's changed

919
00:38:34.320 --> 00:38:34.920
dramatically.

920
00:38:35.320 --> 00:38:39.000
And so they just sell a really outdated product for an egregious price.

921
00:38:39.440 --> 00:38:41.600
And so the market continues to shift.

922
00:38:41.600 --> 00:38:44.640
So every, every year for the last three years, college enrollment has dropped.

923
00:38:44.640 --> 00:38:48.880
And it's dropping faster every year because Gen Z is like, I don't think

924
00:38:48.880 --> 00:38:49.480
this is our idea.

925
00:38:49.480 --> 00:38:51.560
I'm just going to dance on TikTok now or whatever.

926
00:38:51.560 --> 00:38:54.560
You know, we're all started business because now, because like when I went to

927
00:38:54.560 --> 00:38:56.280
school, like YouTube wasn't a thing.

928
00:38:56.280 --> 00:38:57.840
You know, I mean, Instagram wasn't a thing.

929
00:38:58.160 --> 00:39:03.800
And so like the, the content that exists now wasn't there.

930
00:39:03.800 --> 00:39:05.200
And how old are you, by the way, 33?

931
00:39:05.720 --> 00:39:06.320
Sam Zs.

932
00:39:06.360 --> 00:39:06.920
There you go.

933
00:39:06.920 --> 00:39:08.080
Same age, same physique.

934
00:39:08.080 --> 00:39:08.400
It's great.

935
00:39:08.400 --> 00:39:08.760
Done.

936
00:39:09.520 --> 00:39:17.720
And so this marketplace of alternative education sprouted from demand.

937
00:39:18.120 --> 00:39:19.840
People want to have these skills.

938
00:39:19.840 --> 00:39:22.440
And so a market will always appear where there's demand.

939
00:39:22.760 --> 00:39:24.120
And so people started providing that.

940
00:39:24.120 --> 00:39:26.360
I do think that we're in kind of still early days.

941
00:39:26.360 --> 00:39:32.480
Big picture, all in alternative education, because there will be illegitimate

942
00:39:32.480 --> 00:39:34.080
players and there will be legitimate players.

943
00:39:34.080 --> 00:39:36.360
Because if someone wants to learn a skill and someone says like, I want to learn

944
00:39:36.360 --> 00:39:38.960
how to sell and there's a sale school, what's wrong with that?

945
00:39:39.320 --> 00:39:42.520
The problem for the alternative education scene is that is the

946
00:39:42.520 --> 00:39:46.200
expectations that people set and the track record that they lie about.

947
00:39:47.160 --> 00:39:49.200
So I'll dive into both those real quick.

948
00:39:49.200 --> 00:39:52.520
So the expectations that are set is the primary issue that people don't

949
00:39:52.520 --> 00:39:56.080
have a problem with formal education and do have a problem with alternative

950
00:39:56.080 --> 00:39:56.560
education.

951
00:39:56.920 --> 00:40:00.680
So people spend $200,000 and four years and go into debt that they can't get

952
00:40:00.680 --> 00:40:03.080
out of because college promises nothing.

953
00:40:04.560 --> 00:40:05.160
They promise nothing.

954
00:40:05.240 --> 00:40:07.040
Yeah, they don't say you're guaranteed to get a job.

955
00:40:07.040 --> 00:40:08.560
They just say you'll have four years here.

956
00:40:08.680 --> 00:40:09.240
You might.

957
00:40:09.240 --> 00:40:09.760
Good luck.

958
00:40:10.080 --> 00:40:12.560
What we do guarantee is that if you get grades, we'll give you a diploma.

959
00:40:12.760 --> 00:40:13.520
That's the guarantee.

960
00:40:13.840 --> 00:40:14.880
And they fulfill that promise.

961
00:40:15.600 --> 00:40:17.760
Which there's a whole another conversation by expectation setting.

962
00:40:18.000 --> 00:40:20.360
On the other hand, a guy sells a $1,000 course and promises that you're going

963
00:40:20.360 --> 00:40:22.120
to make $10,000 within 30 days.

964
00:40:22.760 --> 00:40:24.760
The course may be exceptional and may teach a lot of skills.

965
00:40:24.760 --> 00:40:27.120
But if someone doesn't make $10,000 in 30 days, they hate the guy.

966
00:40:27.800 --> 00:40:28.200
Yeah.

967
00:40:28.600 --> 00:40:31.880
And so even though there may be in a very real way more value in that course

968
00:40:31.880 --> 00:40:34.560
than they do get in the in the four year education.

969
00:40:34.560 --> 00:40:39.680
And my wife's father is actually a former dean of engineering school professor.

970
00:40:39.680 --> 00:40:42.520
And he said and he's like bought some of the courses and he's like making

971
00:40:42.520 --> 00:40:43.400
money online now.

972
00:40:43.760 --> 00:40:45.840
And he's like, I would never tell someone to go to school anymore.

973
00:40:45.840 --> 00:40:48.200
He's like, I've learned so much more from these courses than I did

974
00:40:48.200 --> 00:40:49.480
from anything that we teach at school.

975
00:40:50.120 --> 00:40:52.560
And so like the the the game has shifted.

976
00:40:52.560 --> 00:40:56.680
And now also because YouTube has just blown up a lot of really good stuff

977
00:40:56.680 --> 00:40:58.040
is available online for free.

978
00:40:58.280 --> 00:40:58.800
Yes.

979
00:40:58.800 --> 00:41:06.560
And so all that to say fake guru in my opinion just comes down to deception.

980
00:41:07.120 --> 00:41:12.000
So deception in terms of what you did to to validate yourself to say that you

981
00:41:12.000 --> 00:41:12.680
are an authority.

982
00:41:13.000 --> 00:41:15.560
So it's kind of like the example of like I won a hundred million dollar

983
00:41:15.560 --> 00:41:16.080
business.

984
00:41:16.560 --> 00:41:19.320
And what it really means is like all of the customers that I've ever

985
00:41:19.320 --> 00:41:22.560
serviced over my entire life make a hundred million dollars.

986
00:41:23.280 --> 00:41:26.600
And you're actually an agency that has 10 clients.

987
00:41:26.600 --> 00:41:30.160
And one of them happens to be like if someone it's like if my if vendor

988
00:41:30.160 --> 00:41:35.080
from in this this shit happens is a vendor of mine makes like one TikTok

989
00:41:35.080 --> 00:41:35.840
a month for me.

990
00:41:36.400 --> 00:41:40.160
And he's and then he would say I, you know, my clients make half a billion

991
00:41:40.240 --> 00:41:42.240
out with see then he's even still putting clients in.

992
00:41:42.240 --> 00:41:46.040
But some guys will just drop the clients and be like our, you know,

993
00:41:46.040 --> 00:41:47.760
our company is 500 million dollars a year.

994
00:41:47.840 --> 00:41:48.600
Like that's a lie.

995
00:41:48.880 --> 00:41:49.160
Right.

996
00:41:49.160 --> 00:41:51.640
And so it's really about the premise and the expectations that's being set.

997
00:41:51.920 --> 00:41:56.440
If someone says I was a sales guy at a company and I was a top 10% sales guy

998
00:41:56.440 --> 00:41:58.240
for five years, I can teach you how to sell.

999
00:41:58.640 --> 00:42:02.560
Um, that's a pretty straightforward like and he teaches somebody how to sell.

1000
00:42:02.600 --> 00:42:05.280
And the way that he delivers that is of course in some sort of like, you know,

1001
00:42:05.280 --> 00:42:08.120
call feedback and reviews calls because you know, maybe helps you get a job.

1002
00:42:08.600 --> 00:42:11.080
Like that's a business and it's a demand.

1003
00:42:11.080 --> 00:42:14.240
And the person wanted to get a sales job, which there is no good college career,

1004
00:42:14.240 --> 00:42:15.440
your path for sales.

1005
00:42:15.920 --> 00:42:18.200
So the demand existed in the market created itself.

1006
00:42:18.560 --> 00:42:22.320
I think a lot of the issues with it is that it's like the further it goes down

1007
00:42:22.320 --> 00:42:24.760
the rabbit hole of it starts with a good intent.

1008
00:42:24.760 --> 00:42:28.760
And then people teach people how they're going to like how to sell.

1009
00:42:29.040 --> 00:42:31.400
And then now they're like, Oh, I've learned everything from this course.

1010
00:42:31.480 --> 00:42:34.520
Now I'm going to get some people to teach them what I learned from this person.

1011
00:42:34.520 --> 00:42:37.160
And it just gets like, I don't want to say dumber and dumber,

1012
00:42:37.160 --> 00:42:41.680
but it's like less, yeah, less from the authenticity of like the top of the funnel.

1013
00:42:41.680 --> 00:42:42.160
Mm-hmm.

1014
00:42:42.640 --> 00:42:43.480
It's interesting stuff.

1015
00:42:43.480 --> 00:42:47.120
It's, and that's, and that's so it's either it's the deceit around expectations

1016
00:42:47.120 --> 00:42:48.680
and it's the deceit around legitimacy.

1017
00:42:48.720 --> 00:42:52.080
And I think those are the two core issues for why like if those two problems were

1018
00:42:52.080 --> 00:42:55.800
solved and like let's just play out a perfect scenario.

1019
00:42:56.280 --> 00:42:59.960
If someone, you know, if Bob Eiger from Disney now Bob Eiger from Disney doesn't

1020
00:42:59.960 --> 00:43:03.440
need to sell a course because he's rich enough on its own on his own.

1021
00:43:03.440 --> 00:43:09.120
But if Bob Eiger wanted to sell a course on how to be CEO and said, I'm Bob Eiger

1022
00:43:09.120 --> 00:43:10.440
and I've been CEO of Disney.

1023
00:43:11.400 --> 00:43:14.120
And I promise you that all I'm going to teach you is the lessons that I've learned.

1024
00:43:15.720 --> 00:43:17.560
I don't think people would have an issue with it, right?

1025
00:43:17.680 --> 00:43:18.400
They would buy the course.

1026
00:43:18.400 --> 00:43:19.320
They wouldn't buy the course, whatever.

1027
00:43:19.520 --> 00:43:22.520
But like he's not going to say, if you do this, you'll be CEO of a company.

1028
00:43:22.680 --> 00:43:24.360
That's where he'd get in trouble, right?

1029
00:43:24.360 --> 00:43:28.200
So it's what's my legitimacy and what are the expectations that I'm setting for the

1030
00:43:28.200 --> 00:43:28.720
customers?

1031
00:43:28.720 --> 00:43:31.240
What promises am I am I making and can I deliver on them?

1032
00:43:31.600 --> 00:43:34.360
And so it's like, if we have these two things that are legit, here's why you should trust

1033
00:43:34.360 --> 00:43:35.880
me and you're not lying or exaggerating.

1034
00:43:36.200 --> 00:43:40.280
And then here's the expectation you should have and you're not lying or exaggerating.

1035
00:43:40.320 --> 00:43:41.440
I think you're completely in the clear.

1036
00:43:41.840 --> 00:43:45.240
But most people can't do that because it's so easy to just push it a little bit,

1037
00:43:45.280 --> 00:43:49.080
just a little bit and get way more people to buy and raise your price by a lot more and

1038
00:43:49.080 --> 00:43:49.640
blah, blah, blah, blah.

1039
00:43:49.920 --> 00:43:50.320
Yeah.

1040
00:43:50.560 --> 00:43:52.280
And I completely agree with you.

1041
00:43:52.280 --> 00:43:57.720
Do you, do you, well, do you sell any courses on how to, no, it's all free on the site.

1042
00:43:57.720 --> 00:43:58.320
You don't have to opt in.

1043
00:43:58.560 --> 00:44:03.120
You know, some things I look at is, and I guess some people want to have maybe a,

1044
00:44:05.360 --> 00:44:08.160
they want to pay someone to have this specific, like I paid.

1045
00:44:08.160 --> 00:44:11.800
So I'm going to feel like I need to follow through with something because in my head,

1046
00:44:11.800 --> 00:44:13.240
and maybe that's just how my brain works.

1047
00:44:13.320 --> 00:44:18.000
I'm like, why would you pay someone if people who are building businesses like you,

1048
00:44:18.000 --> 00:44:22.120
like maybe even a Gary Vee or something, they're literally putting out hours and hours,

1049
00:44:22.120 --> 00:44:26.000
hours a week of content of what they're doing, how they do it, tips.

1050
00:44:26.240 --> 00:44:28.040
And I'm like, why wouldn't you just listen to these people?

1051
00:44:28.520 --> 00:44:30.040
So people should do that.

1052
00:44:30.920 --> 00:44:33.280
But most people aren't that way.

1053
00:44:33.280 --> 00:44:36.840
And so there's a couple of things that like, I, you know, a tweet that went really viral

1054
00:44:36.840 --> 00:44:40.120
mine was, give away the secret, sell the implementation, right?

1055
00:44:40.120 --> 00:44:43.840
And so, you know, you could make the same argument, like use all my stuff and get to 100

1056
00:44:43.840 --> 00:44:45.120
million, which you can, right?

1057
00:44:45.120 --> 00:44:48.960
But you also want personalization, which is like, does this apply to my company right now?

1058
00:44:50.160 --> 00:44:50.520
Well, okay.

1059
00:44:50.520 --> 00:44:53.760
Well, that requires nuance and I can't make personalized nuance in a video, right?

1060
00:44:54.160 --> 00:44:56.920
And so a lot of people think, and this is the crazy thing.

1061
00:44:56.920 --> 00:44:58.880
People think that if they give away their secrets, they're not going to make money,

1062
00:44:58.880 --> 00:45:01.640
but you're going to make more money if you give away shit because you're just afraid of it, right?

1063
00:45:01.800 --> 00:45:03.040
And so you sell the implementation.

1064
00:45:03.040 --> 00:45:07.800
And so to your point, like fundamentally, the entire fitness industry is based on selling

1065
00:45:07.800 --> 00:45:12.160
accountability, like stop eating and move more, like it's not complicated, right?

1066
00:45:12.360 --> 00:45:14.040
But the heart is in the execution.

1067
00:45:14.040 --> 00:45:21.720
And so that's, so to your point, should people just execute, sure, do they?

1068
00:45:21.840 --> 00:45:23.520
No, demand market.

1069
00:45:23.920 --> 00:45:25.320
And so they're like, I need help.

1070
00:45:25.320 --> 00:45:26.600
I need someone to hold me accountable.

1071
00:45:26.600 --> 00:45:27.600
I need someone to personalize it.

1072
00:45:27.600 --> 00:45:30.800
If I get, if I have a plateau, someone who's done this with a hundred other people before

1073
00:45:30.800 --> 00:45:32.720
me so that I can avoid the common pitfalls.

1074
00:45:33.240 --> 00:45:36.720
And so that, that promise exists in every industry.

1075
00:45:36.720 --> 00:45:37.880
You want to implement a CRM?

1076
00:45:37.880 --> 00:45:38.120
Sure.

1077
00:45:38.120 --> 00:45:41.160
You can watch the CRM videos, but they're probably not perfect for you or your business right

1078
00:45:41.160 --> 00:45:42.640
now, so you pay for implementation.

1079
00:45:43.080 --> 00:45:46.240
You know, if you have, you know, a gardening thing, like you can teach people how to garden,

1080
00:45:46.240 --> 00:45:47.520
but then some people like, can you just do it for me?

1081
00:45:47.520 --> 00:45:47.920
Sure.

1082
00:45:48.360 --> 00:45:49.000
Like, you know what I mean?

1083
00:45:49.000 --> 00:45:50.160
Like all of these things,

1084
00:45:51.160 --> 00:45:55.200
there's always an opportunity like you can provide all the value up front and people will

1085
00:45:55.200 --> 00:45:55.840
still want help.

1086
00:45:56.000 --> 00:45:58.360
And I think that that's a totally noble and fine business.

1087
00:45:58.360 --> 00:45:59.400
You help people out who want it.

1088
00:45:59.560 --> 00:46:00.600
You help everyone else for free.

1089
00:46:01.000 --> 00:46:01.520
It's a win win.