WEBVTT

1
00:00:00.000 --> 00:00:04.760
Sometimes you don't want to signal to the marketplace that you're killing it because they need that you just invite more competitors

2
00:00:04.760 --> 00:00:08.240
And it's like you want to expand almost like in silence and then overnight

3
00:00:08.240 --> 00:00:11.760
So everyone realizes how big you are and then they're like, oh shit, I can't I can't compete with that

4
00:00:13.920 --> 00:00:19.160
I want to build acquisition.com into a billion or multi-billion dollar company and

5
00:00:19.680 --> 00:00:23.520
For those you've been here since day one my podcast started in

6
00:00:24.480 --> 00:00:25.760
July of

7
00:00:25.760 --> 00:00:30.520
17 I believe and I had just lost everything for the last time

8
00:00:31.640 --> 00:00:34.120
90 days prior to that the podcast more than any other

9
00:00:35.600 --> 00:00:39.000
Source of information has kind of my documented

10
00:00:39.680 --> 00:00:44.800
Thoughts along the way and so I have made an attempt to return to that baseline of

11
00:00:45.440 --> 00:00:49.720
Documenting what's going on and so these are my end of 2024

12
00:00:50.720 --> 00:00:55.440
Basically strategic plans. So some companies keep these as a as a big secret

13
00:00:56.640 --> 00:00:58.640
I will just share them with you

14
00:00:58.640 --> 00:01:01.480
How is acquisition.com going to become a billion dollar company?

15
00:01:01.480 --> 00:01:05.040
And I think I think in talking about this you can still apply the thinking

16
00:01:05.680 --> 00:01:12.160
Process to your business because it's my belief that any company can get to a hundred million plus at least

17
00:01:12.160 --> 00:01:16.480
Billion is a little harder it depends on the opportunity vehicle any business can morph into

18
00:01:17.200 --> 00:01:20.680
$100 million plus business when I say 100 million I mean 100 million in enterprise value

19
00:01:20.680 --> 00:01:23.840
So think you know 10 to 15 million dollars in profit

20
00:01:24.520 --> 00:01:30.600
For a company now if you have a single brick and mortar whatever sure that can't but if you own a bunch of them

21
00:01:30.600 --> 00:01:35.480
It can it's really thinking about the more scaled version of your business now if you're online

22
00:01:35.480 --> 00:01:37.520
Then still you probably be able to do that as well

23
00:01:37.760 --> 00:01:43.680
You'd probably have to go international there's things like that, but like there's still always a way right I will walk you through kind of

24
00:01:44.080 --> 00:01:48.480
My acquisition.com flywheel as it currently sits today

25
00:01:48.960 --> 00:01:53.280
It starts with the inputs and so the inputs for us are actually media, right?

26
00:01:53.280 --> 00:01:58.480
And I think all businesses start that way, which is you have to begin with with getting getting attention right if you have no attention

27
00:01:58.480 --> 00:02:01.280
No, no, as you exist. No, no, as you exist. No one can transact with you in any way

28
00:02:01.280 --> 00:02:03.280
And so it actually started with the media

29
00:02:03.280 --> 00:02:09.080
So that was why I wrote the the first book and the second book and obviously the third book just coming out next year

30
00:02:09.480 --> 00:02:14.280
And I make the content and I write emails and I make these podcasts things like that, right?

31
00:02:14.280 --> 00:02:17.480
So that's the media so with the flywheel the idea is okay

32
00:02:17.480 --> 00:02:23.400
How can I get this thing going in it can stuff propel right so I wouldn't say that this is exactly at that point yet

33
00:02:23.400 --> 00:02:24.920
So this is me just being transparent

34
00:02:24.920 --> 00:02:29.720
But this is kind of the logical sequence that it flows in if we create a lot of media for business owners

35
00:02:30.200 --> 00:02:35.720
Then that will get more business owners to find out about our stuff and potentially want to do deals with us

36
00:02:36.120 --> 00:02:43.240
And so that then gets them into our ecosystem if we have a lot of business owners that wants to do deals with us

37
00:02:43.240 --> 00:02:46.600
We will probably be able to do a few deals with select business owners

38
00:02:47.400 --> 00:02:50.520
That are on good terms right and at a good price fair price whatever

39
00:02:51.320 --> 00:02:56.840
From there some of those companies will perform or outperform the market by a wide margin

40
00:02:57.720 --> 00:03:02.760
Those companies that are performed by a wide margin will eventually have some sort of liquidity event

41
00:03:02.840 --> 00:03:05.640
Whether that's going public or getting acquired like we'll sell you know

42
00:03:05.640 --> 00:03:07.640
We'll resell it three five years down the line

43
00:03:08.040 --> 00:03:14.600
And then we will be able to document those stories which will reinforce the brand and then allow us to make more media from an even higher level of credibility

44
00:03:15.160 --> 00:03:18.760
This is kind of the this is the flywheel at least this is the strategy

45
00:03:19.240 --> 00:03:20.040
Now

46
00:03:20.040 --> 00:03:26.120
Part of this is there's a parallel strategy that laylose kind of on the for on the the spearhead on which you might not know this

47
00:03:26.120 --> 00:03:30.920
But the reason laylose contents a little bit different than mine one is because her day-to-day difference

48
00:03:31.000 --> 00:03:32.280
Things about different stuff

49
00:03:32.280 --> 00:03:36.200
But a big part of it is also because she attracts top level talent

50
00:03:36.680 --> 00:03:41.800
And so if we look at the people who follow layla for example linked in where we can see people's job titles

51
00:03:42.200 --> 00:03:45.880
A huge percentage people follow layla are people who are executives

52
00:03:46.280 --> 00:03:53.160
So they are people who run large teams and that's exactly who we need to attract to build these companies from

53
00:03:54.040 --> 00:03:57.800
Lowman market or mid market into a bigger-sized organization

54
00:03:58.440 --> 00:04:00.760
Now let me tell you the flaw on my plant

55
00:04:01.640 --> 00:04:03.720
The flaw on my plan is that it takes time

56
00:04:05.000 --> 00:04:06.600
Right it takes time

57
00:04:07.480 --> 00:04:11.720
To it takes time to attract companies takes time to do deals it takes time for once you do a deal for

58
00:04:12.360 --> 00:04:16.040
A deal to grow and unfortunately the internet measures in seconds

59
00:04:16.920 --> 00:04:22.680
Not in not in decades and investor who has who who doesn't have like a you know a 10-year track record

60
00:04:22.680 --> 00:04:27.080
It's like it's very hard to know if they're good or not because it just takes a long time for things to come

61
00:04:27.560 --> 00:04:31.080
To fruition and so this has been one of my larger frustrations where

62
00:04:31.480 --> 00:04:37.800
Because of the nature of the deals we do we are in a minority position in all but two of our companies

63
00:04:38.200 --> 00:04:43.000
I've our average positions right right around 40% and if you're like why isn't an exact number

64
00:04:43.400 --> 00:04:47.400
It's because we have like options and performance triggers and things like that sometimes in the deals and so it can affect

65
00:04:47.800 --> 00:04:52.520
Kind of the average, but it's right around it's between 38 and 40% is the is the is the average that we're at

66
00:04:53.080 --> 00:04:55.080
And so we have material chunks of the companies that we have

67
00:04:55.160 --> 00:04:57.960
We're not always in a majority position because honestly a lot of people come from

68
00:04:58.760 --> 00:05:02.920
From our content or know my stuff like they want help growing. They're not actually looking for that

69
00:05:03.560 --> 00:05:08.360
Big exit from us. They're looking to help us create the monster exit with them

70
00:05:08.760 --> 00:05:11.960
And we've been able to do that the problem is that

71
00:05:12.920 --> 00:05:16.280
Unless I'm associating publicly with a brand like school for example

72
00:05:16.680 --> 00:05:22.680
The rest of our deals we're under NDA and the reason we do that is twofold so one is that

73
00:05:23.560 --> 00:05:27.800
It looks like I'm the only reason the company grow and I don't think that's fair to the founders

74
00:05:27.800 --> 00:05:32.440
And so I think like on one level protects them and they're their personal brands of what they want to have happen later

75
00:05:32.440 --> 00:05:34.760
Which I totally understand and on the flip side

76
00:05:35.640 --> 00:05:40.840
If I associate with all the companies that I car publicly then I become key man risk for everything I buy

77
00:05:41.240 --> 00:05:46.280
Which then means I get worse deal terms than everyone else does at the point of sale which sucks

78
00:05:46.840 --> 00:05:49.240
And so I don't want that because of that

79
00:05:49.320 --> 00:05:54.040
We separate brand from work very clearly in the deals that we do

80
00:05:54.840 --> 00:05:57.560
And obviously capital right when we approach these deals

81
00:05:57.640 --> 00:05:59.160
I kind of have these wheels on my head

82
00:05:59.160 --> 00:06:04.120
So I've got like brand and traffic and endorsement things like that and then I've got I've got cash

83
00:06:04.440 --> 00:06:08.120
Right and then I've got expertise right these are the things that we can bring to the table

84
00:06:08.440 --> 00:06:13.560
And so it's a combination of those things that ultimately creates the deal that works for everyone or it doesn't work right

85
00:06:14.200 --> 00:06:17.080
But the big flaw that I have in the plan is that

86
00:06:17.720 --> 00:06:22.840
It would be like I have to I have to whitewash the numbers and even then sometimes I get a little bit of pushback

87
00:06:23.000 --> 00:06:25.080
From the founders to be like, hey man, I don't want our numbers out there

88
00:06:25.080 --> 00:06:29.160
And so I try and be as you know as vanilla as I can

89
00:06:29.160 --> 00:06:33.640
Sometimes I don't even talk about what industry you know companies and I just say, hey, this is a consumer business

90
00:06:33.640 --> 00:06:36.840
Or this is a business business or this is a local you know chain or whatever

91
00:06:37.320 --> 00:06:41.240
But still it's honest. I'm just being honest. It's tough. It's tough because I would love to flex

92
00:06:41.880 --> 00:06:45.320
Some of the companies that we have it would benefit me tremendously

93
00:06:45.800 --> 00:06:46.680
To do that

94
00:06:46.680 --> 00:06:49.720
But I basically have to wait until we have big

95
00:06:50.280 --> 00:06:55.160
Final outcomes so like even if even if you have a company that raises it a high valuation for example

96
00:06:55.160 --> 00:06:59.080
Like because we have software companies and yet you show a monster you know improvement

97
00:06:59.960 --> 00:07:04.200
Sometimes you don't want to signal to the marketplace that you're killing it right because they need that you just invite

98
00:07:04.680 --> 00:07:11.000
More more competitors more more more people in the space and it's like you want to you want to expand almost like in silence

99
00:07:11.640 --> 00:07:16.120
And then overnight some everyone realizes how big you are and then they're like oh shit. I can't I can't compete with that

100
00:07:16.520 --> 00:07:17.560
so

101
00:07:17.560 --> 00:07:18.840
Which is tough

102
00:07:18.840 --> 00:07:19.800
You know for me

103
00:07:19.800 --> 00:07:25.560
But I will always act in the best interest of the businesses even if it hurts me publicly like I'll never I'll never sacrifice

104
00:07:25.560 --> 00:07:28.920
Because that's to be honest. That's the main thing right on long enough time rising

105
00:07:29.240 --> 00:07:34.200
So it's like if you think about the internet and the short term it's like Warren Buffett talks about this with stocks in the short term

106
00:07:34.760 --> 00:07:39.800
The stock market is a is a voting system and in the long term it's a weighing system right

107
00:07:39.880 --> 00:07:44.280
So voting systems what's popular weighing system is what's valuable how how much

108
00:07:44.840 --> 00:07:49.720
Mass is this thing grown over a longer period of time and so I kind of see reputation the same way

109
00:07:50.200 --> 00:07:56.200
Which is in the short term you can have hits they go viral you can have big things you can have a book launch

110
00:07:56.200 --> 00:07:58.200
You can you'll be there stuff right

111
00:07:58.200 --> 00:08:06.280
But the only thing that has sticking power is what is accomplished what actually happens long term and that is always going to be the thing that I'm indexing towards rather than

112
00:08:07.240 --> 00:08:09.240
You know the the short-term

113
00:08:09.240 --> 00:08:13.640
popularity contest of the internet which you know as we all know is a seven-day news cycle

114
00:08:13.640 --> 00:08:17.080
By and large that is that is the acquisition.com

115
00:08:18.040 --> 00:08:21.080
Flywheel now something that we started this year which I'm super proud of

116
00:08:21.960 --> 00:08:28.920
Is ACQ ventures we brought in Zach Choi as a as a managing director on that side and these are true ventures

117
00:08:28.920 --> 00:08:34.200
So like we have operated as a private equity firm in terms of how we operate it with the exception that we don't have LP

118
00:08:34.280 --> 00:08:38.040
So limited partner so we don't we don't take on an outside capital. It's just Laila nice money

119
00:08:39.000 --> 00:08:41.320
That we got from Jim launch first

120
00:08:41.960 --> 00:08:44.520
From the sale and obviously from the distributions we took before

121
00:08:45.480 --> 00:08:50.600
Before exiting the company and then now obviously we have a lot of distributions that come from the portfolio companies

122
00:08:50.600 --> 00:08:53.240
We have we have large companies that send big checks

123
00:08:53.720 --> 00:08:57.480
And so that's that's basically the capital that we use to continue to reinvest and so I preferred the

124
00:08:58.120 --> 00:09:00.760
conglomerate holding company structure of Berkshire

125
00:09:01.560 --> 00:09:11.080
To the the PE kind of flipping style on the flip side prefer the kind of work value add of a hands-on or operational private equity firm

126
00:09:11.800 --> 00:09:15.560
Compared to a holding company and so that's where we kind of differ because to be fair

127
00:09:15.560 --> 00:09:19.800
I'm not as good as Warren Buffett. I'm not I'm not I'm not Charlie Munger, right? That's not my strength

128
00:09:19.880 --> 00:09:21.880
But I probably know marketing and sales

129
00:09:22.520 --> 00:09:25.480
I might I you know they're old they might know better than me

130
00:09:25.480 --> 00:09:27.720
I don't know but like I feel like I'm pretty pretty decent at it

131
00:09:27.960 --> 00:09:30.440
And so I lean heavy into the things I have right

132
00:09:30.760 --> 00:09:37.720
Every company strategy every investment strategy is a reflection of the outsized or unfair advantages

133
00:09:38.280 --> 00:09:40.440
of the person who's making the investments, right

134
00:09:41.560 --> 00:09:49.000
For us transition back to acq ventures the reason we did acq ventures is because there are many deals that don't fall within that

135
00:09:50.120 --> 00:09:55.320
That structure of private equity like big partner big work big growth

136
00:09:56.280 --> 00:10:01.880
And instead are more traditional venture checks so venture checks are usually like smaller

137
00:10:02.600 --> 00:10:03.720
checks

138
00:10:03.720 --> 00:10:07.880
By percentage of company not necessarily by size of check but by percentage

139
00:10:08.760 --> 00:10:13.960
Of company ownership and typically the way that we're structuring these are these are these are much more hands-off

140
00:10:14.520 --> 00:10:17.160
Light work, but not like heavy implementation

141
00:10:17.320 --> 00:10:22.040
And so we're able to do significantly more of those also because it turns out we have a whole bunch of interest in that

142
00:10:22.120 --> 00:10:27.800
Which is like hey, it'd be cool if I could touch base with the team a few times a year and make sure things are going well

143
00:10:28.440 --> 00:10:31.080
And you know use this capital continue to grow more aggressively

144
00:10:31.080 --> 00:10:36.440
I think in December we'll have done our first three deals and acq ventures and you'll be like wow three deal

145
00:10:36.600 --> 00:10:39.400
So things his venture checks again, it's it's a more of a volume game there

146
00:10:39.880 --> 00:10:44.680
Whereas the the private equity or family office side it's way more about like doubling down on on winners

147
00:10:44.680 --> 00:10:51.400
I guess VCs that way too, but it's more of a spray and pray of course they would never say that but the risk per deal is significantly higher

148
00:10:51.880 --> 00:10:56.520
But the aggregate risk is lower by increasing the end so increasing the number of deals you do

149
00:10:56.840 --> 00:10:59.720
Whereas in private equity the per deal risk is significantly lower

150
00:10:59.960 --> 00:11:03.560
But typically the work in the in the check size and things like that percentage ownership is much larger

151
00:11:03.720 --> 00:11:07.480
And so it's just think about fewer more concentrated bets or more disparate bets

152
00:11:07.560 --> 00:11:14.040
And so that's why given the given the flow of deals that we have there was just this massive amount of deals to be done

153
00:11:14.600 --> 00:11:20.520
Where founders didn't want a full or even partial exit. They just wanted to have some access

154
00:11:21.400 --> 00:11:24.360
To the team and have capital to grow more aggressively

155
00:11:24.680 --> 00:11:27.560
And so that's why we spun this up and it's actually been a big success. We're very happy about it

156
00:11:27.880 --> 00:11:29.960
But that's that's more or less like the plan

157
00:11:29.960 --> 00:11:35.720
That's what we're gonna do and we will continue to to to bring you know companies in take a look see what we can do to help

158
00:11:36.280 --> 00:11:38.920
And when we see a big a big swing

159
00:11:39.640 --> 00:11:42.520
We're gonna take it. I'm I'm leaning more into fewer

160
00:11:43.160 --> 00:11:44.680
better deals

161
00:11:44.680 --> 00:11:47.640
With larger check sizes or equal opposite

162
00:11:48.120 --> 00:11:54.200
Many deals with smaller check sizes, but basically kind of getting out of the middle and that's kind of where we started

163
00:11:54.200 --> 00:11:57.080
And so this is me just sharing what we're actually doing

164
00:11:57.080 --> 00:12:00.200
Hopefully you like these slightly higher level uh business stuff

165
00:12:00.200 --> 00:12:04.040
This is I've kind of shied away from this because I was like I don't know how relevant this is gonna be for people

166
00:12:04.520 --> 00:12:10.760
But part of the reason I've tried to I the reason I started making the podcast is because I wanted to document my thinking process from zero

167
00:12:11.080 --> 00:12:15.720
All the way to billion because I thought how cool would it be if jiff base dose or Elon had had a vlog

168
00:12:16.200 --> 00:12:20.440
Or something that had documented this whole thing and so that's been the that's been the work

169
00:12:20.680 --> 00:12:25.560
Love you guys. I appreciate you guys a tremendous amount. I do have uh an interesting thing for you

170
00:12:26.120 --> 00:12:29.000
If you listen to this podcast and haven't read either the books

171
00:12:30.280 --> 00:12:35.320
Read them, you know, they're the they're the best they're the best most concentrated value that I've created

172
00:12:35.720 --> 00:12:39.880
They're free like I mean if you want I think five seventy nine is the first one of this podcast

173
00:12:40.200 --> 00:12:43.080
That has the books if you're like I can't afford thirty dollars. That's fine

174
00:12:43.160 --> 00:12:45.160
You can just listen to the episode

175
00:12:45.240 --> 00:12:48.440
It was just my recommendation especially because the third books didn't come out next year

176
00:12:48.920 --> 00:12:52.360
And I would recommend having those to read for that one

177
00:12:52.440 --> 00:12:54.440
It will be the one that makes people the most money

178
00:12:54.600 --> 00:12:56.280
I wrote the book three first

179
00:12:56.840 --> 00:13:00.920
And then realized I had to write book one and two in order to set the stage for book three

180
00:13:01.560 --> 00:13:06.040
Book three is my cookbook for making money and I'm so excited for you guys to have it but uh

181
00:13:07.480 --> 00:13:12.120
You know just get excited for twenty five to me big year. So appreciate you all and uh

182
00:13:13.080 --> 00:13:15.400
rock and roll