WEBVTT 1 00:00:00.000 --> 00:00:06.560 Switching from business to investing is a massive change in mindset because when you're in business 2 00:00:06.560 --> 00:00:12.000 you're used to selling on it. But when you're doing deals, it's actually about trying to get to know. 3 00:00:14.000 --> 00:00:16.880 Welcome to the game where we talk about how to get more customers, how to make more 4 00:00:16.880 --> 00:00:20.160 customer, and how to keep them longer. And the many failures and lessons we have learned 5 00:00:20.160 --> 00:00:22.080 along the way. I hope you enjoy and subscribe. 6 00:00:25.520 --> 00:00:32.240 Dude, so acquisition.com, obviously a big shift from from gym launch. Like I love your play 7 00:00:32.240 --> 00:00:37.440 right now is like just create value value value value value and basically have the natural 8 00:00:37.440 --> 00:00:42.000 like people reach out and then where you just have your your picking. What are you focusing on 9 00:00:42.000 --> 00:00:47.760 with acquisition.com as far as like if you had the ideal company to invest in, what would that 10 00:00:47.760 --> 00:00:52.320 look like? So an ideal company to invest in, you know, for us is going to be doing, you know, 11 00:00:52.320 --> 00:00:57.280 two to ten million dollars in EBITDA. They're going to have a founder that wants to scale. It's a 12 00:00:57.280 --> 00:01:01.840 big one. A lot of some people think they want to scale but then like they don't actually want to 13 00:01:01.840 --> 00:01:05.680 scale. You know what I mean? Like they double or triple their income and then they're like, oh wow, 14 00:01:05.680 --> 00:01:10.560 I'm good. Like we had a company that we tripled the profit for and then all of a sudden like the 15 00:01:10.560 --> 00:01:15.120 the CEO was golfing every day and I was like, bro, what's happening? Like dude, I'm making more 16 00:01:15.120 --> 00:01:19.120 money than ever made my entire life. I'm like, yeah, but like I'm not in this for this triple. I'm in 17 00:01:19.120 --> 00:01:24.480 this for a 20X or 50X. Like that's why I want to do this, right? Like we want to do big stuff. 18 00:01:24.480 --> 00:01:27.680 And so it's like they have to have big eyes. They have to have big dreams of what they want to 19 00:01:27.680 --> 00:01:32.320 accomplish. They have to be coachable and that's a big one because and this is actually probably 20 00:01:32.320 --> 00:01:36.960 one of the hardest ones to find is that anyone who's achieved a certain level of success has some 21 00:01:36.960 --> 00:01:41.280 level of confidence that they're good. But the problem is like the difference between 22 00:01:41.280 --> 00:01:44.800 and you can appreciate us. They're just going to million a month and 10 million a month is 23 00:01:45.920 --> 00:01:50.560 oceans. I mean, it's and they're like, oh, I'll just do 10 times of what I'm currently making. 24 00:01:50.560 --> 00:01:55.360 It's like not because of what you wouldn't be stuck right now. And so they have to like, 25 00:01:55.360 --> 00:01:59.520 there's really two aspects. So like I'll rewind. There's the business component and there's 26 00:01:59.520 --> 00:02:03.920 the founder, right? Like who we're doing the deal with. Now for us, the founder matters a lot more 27 00:02:04.000 --> 00:02:07.520 than to like a traditional private equity firm. And because traditional private equity firms 28 00:02:07.520 --> 00:02:12.480 they exclusive almost exclusively by majority. We sometimes buy majority, but if we buy majority, 29 00:02:12.480 --> 00:02:15.760 it's like a micro venture like, you know, we're like 51, you know what I mean? And that might 30 00:02:15.760 --> 00:02:19.920 be because we have some sort of grand elements we're tying into it or whatever reason, right? Like 31 00:02:19.920 --> 00:02:23.600 of all the holdings, we only have one majority. We will probably do more because that one's doing 32 00:02:23.600 --> 00:02:28.720 really, really well. But most of our deals are like, you know, 33, 49, 50, well, you know, I mean, 33 00:02:28.720 --> 00:02:33.440 that's kind of the range that we do. So we have a couple early deals. I did it 20. But there's the 34 00:02:33.440 --> 00:02:39.200 founder in the business. The founder is coachable. They are have big dreams. We like actually hanging 35 00:02:39.200 --> 00:02:42.720 out of them because this is like, if I don't look forward to talking to somebody like to me, 36 00:02:42.720 --> 00:02:46.880 that's a big red flag. Like if during the process, any of us have any hesitations, like we have it, 37 00:02:46.880 --> 00:02:51.120 we have this thing called the five flags, which is like if any of these five red flags come up, 38 00:02:51.120 --> 00:02:56.160 we stop the deal immediately. So we don't need like three strikes. We just need one. And so we 39 00:02:56.160 --> 00:03:01.280 just try and codify it. There's any kind of dishonesty or any discrepancy between numbers. 40 00:03:01.280 --> 00:03:05.520 If we feel like they have like a culture of like fear within their organization, those are all 41 00:03:05.520 --> 00:03:10.240 like signs for us that we're like, okay, this is probably not a good fit. On the business side, 42 00:03:10.240 --> 00:03:14.480 it's the more traditional stuff. Like I want to dive a little bit deeper in because you said you 43 00:03:14.480 --> 00:03:18.000 want to have somebody that has big goals, not someone when they triple, they're going to go be on 44 00:03:18.000 --> 00:03:24.240 the golf course. So obviously, that can't be motivated by money because both you and I know that 45 00:03:24.240 --> 00:03:30.160 like money is essentially oxygen, right? Like once you have enough, it no longer motivates or 46 00:03:30.160 --> 00:03:36.960 pushes or whatnot. So like, how do you identify the person that really is able to be driven 47 00:03:36.960 --> 00:03:43.520 past money, past accomplishment, past, you know, a certain level of achievement? How are you 48 00:03:43.520 --> 00:03:48.960 identifying that person? So it's usually in the language patterns that they'll present with. 49 00:03:48.960 --> 00:03:52.320 And so I'll give you a couple different examples that are different, but still would accomplish 50 00:03:52.320 --> 00:03:56.880 the same thing. So some of them might be like, I really want to create an amazing place to work. 51 00:03:56.880 --> 00:04:00.320 That would be one where like, that's going to continue to grow. Like they might want to continue to 52 00:04:00.320 --> 00:04:04.800 get more and more people in and create an amazing place to work. If they said, I want to change 53 00:04:04.800 --> 00:04:07.760 this industry. It's like, if you want to change an industry, it's kind of like, you have to have 54 00:04:07.760 --> 00:04:11.360 a big vision for it. If you want to change your community, same thing. Like if you want to change 55 00:04:11.360 --> 00:04:16.640 the local area, like again, big, big impact. Some of them, it's like, I just want to do something big. 56 00:04:16.640 --> 00:04:20.640 Or like, their desire is to see what they're capable of. Like they want to test their own 57 00:04:20.640 --> 00:04:24.960 metal. And so the whole point of the game for them is to continue to move the bar, right? That would 58 00:04:25.440 --> 00:04:29.200 be another example. And some of them just straight up say, like, I do want to make a ton of money. 59 00:04:29.200 --> 00:04:34.560 And to me, that's fine. As long as that's true. Like they're like, I want to get to a billion-dollar 60 00:04:34.560 --> 00:04:39.600 company. That's bad ass. Like that's fine. I totally respect that. But it's that they actually want 61 00:04:39.600 --> 00:04:43.680 that. And they already have all their personal needs filled. Like if they already have their 62 00:04:43.680 --> 00:04:46.960 monitoring needs fulfilled and they still say that to me, I'm like, okay, this guy wants to 63 00:04:46.960 --> 00:04:52.720 run. So those are like the positive flags. What are the red flags that you see of like somebody that 64 00:04:52.720 --> 00:04:57.040 will be satisfied? Usually they just talk in small numbers. They talk in small number. 65 00:04:57.040 --> 00:05:00.560 And this is from the business perspective. The majority of our flags are actually about the 66 00:05:00.560 --> 00:05:06.480 founder. So like the red flags for the business are, you know, just like, okay, if it's going down, 67 00:05:06.480 --> 00:05:11.120 if it's not profitable, if we don't see a path for growth, if it feels too complicated, 68 00:05:11.120 --> 00:05:14.960 if the founder has like shiny objects syndrome, so like they can't focus on one thing. They're like, 69 00:05:14.960 --> 00:05:17.760 we have got this other business I want to start. This actually happens all the time. So 70 00:05:17.760 --> 00:05:20.800 he comes to us like, I've got this business on a party with you on. I've got these other 71 00:05:20.800 --> 00:05:24.960 three businesses too. And I'm like, close all those and I'll work with you on this. And so it's 72 00:05:24.960 --> 00:05:28.400 like, and sometimes guys will do that. And then they come back. I'm like, this guy's in it. 73 00:05:28.400 --> 00:05:32.320 Other guys are like, I can't do that because of X, Y and Z. And I'm like, cool. Then go chase five 74 00:05:32.320 --> 00:05:37.040 rabbits and hope you catch one. And so like, are they focused? Are they coachable? Are they honest? 75 00:05:37.680 --> 00:05:40.880 And honestly, it's like, you know, a lot of people think about it in terms of like black and white, 76 00:05:40.880 --> 00:05:44.880 like, honest or dishonest. But it's really like how honest are you? Like if I hear a lot of exaggeration 77 00:05:44.880 --> 00:05:48.080 at all points in time, like everything just seems to be rounded. You know what I mean? Like, 78 00:05:48.080 --> 00:05:52.560 oh, we're amazing. Everything's like, if you don't know where the bodies are buried, you're not close 79 00:05:52.560 --> 00:05:57.200 enough. Like you should know where the bodies are buried in every single department. And that's 80 00:05:57.200 --> 00:06:03.280 actually what I might limit says is CEO, not that I am anymore. But when I was CEO, if I don't know 81 00:06:03.280 --> 00:06:07.680 what's going wrong in every department, I'm too far away. If something's just good, I mean, 82 00:06:07.680 --> 00:06:10.960 I don't know what's going on. Because of course, there should always be opportunities for 83 00:06:10.960 --> 00:06:14.480 improvements. I got to know what's happening. So if I hear that kind of language, those are 84 00:06:14.480 --> 00:06:18.240 red flags. And then just the big one of just, they talk in small numbers in terms of growth, 85 00:06:18.240 --> 00:06:21.840 and they talk in small numbers in terms of the ultimate size that they want to grow the thing. 86 00:06:21.840 --> 00:06:25.520 And because like, I can't make you believe more than you do. You bring up a great point of not 87 00:06:25.520 --> 00:06:31.360 only knowing where the bodies are buried in different departments, but being willing to admit 88 00:06:31.360 --> 00:06:36.240 where the bodies are buried, right? I think there's an aspect of business owners where they want to 89 00:06:36.240 --> 00:06:40.400 lie to themselves, whether you're in sales, whether you actually own the business, whatever, 90 00:06:40.480 --> 00:06:46.560 you're managing a department, right? Like one of the most important things in order to enact 91 00:06:46.560 --> 00:06:53.120 change, in order to improve, and it is actually being able to admit where we care, we suck at this, 92 00:06:53.120 --> 00:06:58.400 this, that, and the other, like getting real, right? You know, non-self deceived, right? 93 00:06:58.400 --> 00:07:04.240 Self deception, I think is like the greatest downfall of any CEO, any manager, any salesperson, 94 00:07:04.240 --> 00:07:09.280 right? Like I'm sure you'd agree with me on that. If they're like microcontrollers, 95 00:07:09.280 --> 00:07:13.600 right? Like they want to micromanage everything, like that's another example of like because 96 00:07:13.600 --> 00:07:16.400 the equal opposite, right? There's the pendulum. Like on one side, they're too far away, 97 00:07:16.400 --> 00:07:20.240 they're too disconnected. The other one is too close to everything. And I want to make a point 98 00:07:20.240 --> 00:07:24.800 that I think is worth making, but they also have to have realistic expectations of value, 99 00:07:24.800 --> 00:07:28.880 and they have to be willing to have a smaller slice of a bigger pie. Like a lot of people think 100 00:07:28.880 --> 00:07:33.280 they want that until they're like, what, they want to have the round shape of the pie, right? 101 00:07:33.280 --> 00:07:38.000 And I know you probably can, can preach to this more than anyone that like the more people who are 102 00:07:38.000 --> 00:07:42.800 trying to build something, the bigger it can get, right? Like you didn't have a 100% circle of 103 00:07:42.800 --> 00:07:48.800 your circle, and guess what? Elon Musk has 20% of Tesla, right? But that's still made sense. He 104 00:07:48.800 --> 00:07:53.280 made sense, apparently give 80% to other people to help him build it, and he can still become the 105 00:07:53.280 --> 00:07:59.040 wealthiest man on the planet. And so like having to shift that belief in someone is really hard. 106 00:07:59.040 --> 00:08:03.920 If someone doesn't already come in believing it, like I'm willing to part with the chunk of 107 00:08:04.000 --> 00:08:08.800 the business in order to have a 10 times or 100 times more valuable thing, right? Like if they 108 00:08:08.800 --> 00:08:13.280 don't believe that, and then part of it is also unrealistic expectations of valuations, 109 00:08:13.280 --> 00:08:18.960 because this is actually pretty big. So they hear about your exit, right? They hear about my exit, 110 00:08:18.960 --> 00:08:25.200 and they think, oh, that multiple applies to my $2 million profit, you know, company that 111 00:08:25.200 --> 00:08:30.080 is basically me with a couple of helpers running around and if I die tomorrow, the whole thing dies. 112 00:08:30.640 --> 00:08:37.040 Like, no, it doesn't apply to that, because here's a stat that might astound your audience. 113 00:08:37.680 --> 00:08:42.480 For businesses doing less than 10 million in sales and 2 million in bottom line, 114 00:08:42.480 --> 00:08:46.720 all right? So those are the two numbers. Top line and 2 million bottom line. The average, 115 00:08:46.720 --> 00:08:55.120 like the median trading value is 2.5x on profit. That's the median. It's like that's the middle, 116 00:08:55.120 --> 00:09:00.560 right? And over 80% depending on the source. So this is SBA. So small business administrations 117 00:09:00.560 --> 00:09:05.680 want to come out of these stats. The huge component of seller finance. And so that 2.5x is also not 118 00:09:05.680 --> 00:09:11.120 cash. Like that 2.5x is the total enterprise value. And the person who's bought, like, so like, 119 00:09:11.120 --> 00:09:15.680 let's say you did a hypothetical deal with somebody doing $1 million a year, okay? So one in profit, 120 00:09:15.680 --> 00:09:19.680 all right? So $1 million a year in 12 months. And let's say they got the median valuation. So 121 00:09:19.680 --> 00:09:24.160 the person who's buying is adding no value. They're just buying the asset. They're coming in to do 122 00:09:24.160 --> 00:09:28.480 nothing, right? Because that's who is buying this, right? If you and I might want to buy something, 123 00:09:28.480 --> 00:09:32.480 I would expect to get a discount on something because I'm going to be doing a little work to 124 00:09:32.480 --> 00:09:36.640 growth thing, right? I don't want to pay you to work. So the idea is like, okay, let's think 125 00:09:36.640 --> 00:09:41.840 through this. Million dollars, 2.5x is the median. And let's say 90% of them have seller carry. 126 00:09:41.840 --> 00:09:46.400 Okay, well, if you're selling half the business, then now we're at 1.25. And let's say, 127 00:09:46.400 --> 00:09:50.640 and you have a seller carry. So you might only get a few hundred thousand dollars for half the 128 00:09:50.640 --> 00:09:55.200 business. Now, again, the part of it is that people then in that situation, and this is where 129 00:09:55.200 --> 00:10:00.880 deals don't happen, is that they're like, I'm worth at least 10. It's like, you're not, bro. 130 00:10:01.520 --> 00:10:07.200 Like you're not, because you can't walk away. Like you could walk away from business. And it still 131 00:10:07.200 --> 00:10:12.880 grows. Like Jim launch continues to grow. And Alex is on a podcast with Chris right now. 132 00:10:14.000 --> 00:10:18.240 The idea is that you have the build an asset that can grow in its own. And that takes time. And 133 00:10:18.240 --> 00:10:22.560 the thing is, is that people are really impatient, or they feel like they're getting, I mean, 134 00:10:22.560 --> 00:10:26.080 to be fair, that's the nature of deals is that both people have through great, right? But like, 135 00:10:26.080 --> 00:10:30.640 that's, that's a big one. Is that a lot of founders will have realistic expectations about how 136 00:10:30.640 --> 00:10:34.640 valuable the company that builds is because they're measuring it based on the effort they put in, 137 00:10:34.640 --> 00:10:38.480 rather than the output it was been created. Yeah, it's so interesting how many people are 138 00:10:38.480 --> 00:10:45.360 self deceived on the actual total enterprise value. I had a guy give me an offer the other day for, 139 00:10:45.360 --> 00:10:50.240 he's got an Instagram profile with a ton of followers and he's netting like three, 140 00:10:50.240 --> 00:10:55.600 50 a year and everything like that. And he wanted, there's some like five or six multiples 141 00:10:55.600 --> 00:11:02.240 on a social media platform, like a social media account that is dependent on him as the face. 142 00:11:02.240 --> 00:11:09.360 And it's just like, dude, what in what world says this worth five to six multiples? You're crazy. 143 00:11:10.320 --> 00:11:16.640 Like you get out of here, man. And it's so amazing, like how self deceived people are. 144 00:11:16.640 --> 00:11:21.360 Dude, I want to dive into one other thing that you kind of mentioned. And I know that your 145 00:11:21.360 --> 00:11:29.040 phenomenal act is like, walk me through how you get to know, right? How do you tell yourself, 146 00:11:29.040 --> 00:11:34.160 know and get away from like the shiny objects and how do you keep digging in the same hole 147 00:11:34.240 --> 00:11:40.640 that is boring or whatnot? Like what are the mental exercises for you as an entrepreneur that 148 00:11:40.640 --> 00:11:46.240 keep you disciplined to continue to say no and only say to the one, yes, to the one thing that 149 00:11:46.240 --> 00:11:50.720 is giving you the most value. I think that this is probably like if there's a single trade of 150 00:11:50.720 --> 00:11:55.280 entrepreneurs that can make them successful, it is if they can master this. And it's also probably 151 00:11:55.280 --> 00:11:58.880 the hardest one to master because we're the best people at deceiving ourselves when it comes to this. 152 00:11:58.880 --> 00:12:02.560 Like we convince ourselves that this new opportunity to give you worth more. And there's a lot of 153 00:12:02.560 --> 00:12:05.600 natural, you know, follow questions like, well, when do you know when to pivot? Like when you know 154 00:12:05.600 --> 00:12:09.360 you've tried enough, like when you need to change your idea and things like that, I would say that 155 00:12:09.360 --> 00:12:13.840 post product market fit. All right, so this is a big caveat. And this is why advice gets hard because 156 00:12:13.840 --> 00:12:18.560 it depends on the season right. If you have product market meeting, people don't want to buy your 157 00:12:18.560 --> 00:12:22.320 thing, right? They don't like to think yourself. Then yeah, you should iterate. Keep trying new things 158 00:12:22.320 --> 00:12:28.320 until eventually you start getting buyers. At that point, you lock it. And then you say, if I only 159 00:12:28.400 --> 00:12:34.000 did this thing for the next 10 years, would I get this outcome? And if that outcome is a yes, 160 00:12:34.000 --> 00:12:38.400 then anything that's not that, like you already have the deal with yourself that you're willing to 161 00:12:38.960 --> 00:12:41.840 get that big outcome. So like for acquisition, I mean, imagine the amount of opportunities 162 00:12:41.840 --> 00:12:46.720 that we get right now that are like, dude, could you, like, dude, if you built this thing and 163 00:12:47.840 --> 00:12:53.440 if we were like, dude, you should sell a course. And you know what, if I did, I probably would make 164 00:12:53.440 --> 00:12:58.720 more than my course creator. So I did that. But with that to track from the one thing that mattered 165 00:12:58.720 --> 00:13:06.640 most, right? And I think most times the focus is that people can say no to the fast money. And by 166 00:13:06.640 --> 00:13:11.040 doing that, they say no to the big money, which is the long money, which is the money you got 167 00:13:11.040 --> 00:13:16.720 away from. Right? Because like, no big things love that are built fast. Like I'm very convinced 168 00:13:16.720 --> 00:13:21.760 about this. Like, almost everybody goes to this like five to seven years of eating period where 169 00:13:21.760 --> 00:13:26.080 you just don't, it doesn't feel like you're making progress. And as tacky as this may sound, like 170 00:13:26.080 --> 00:13:32.080 your overarching strategy is hope, like unshagable faith that it's going to happen. But being paranoid 171 00:13:32.080 --> 00:13:36.400 about the present that it's going to die. Right? So it's, and I think Jim Collins, he has some sort 172 00:13:36.400 --> 00:13:40.240 of dust position that he said more elegantly than me, but it's maintaining both those things. And 173 00:13:40.240 --> 00:13:47.280 so for me, my ultimate vision is that like acquisition, compounds into a billion or or higher 174 00:13:47.280 --> 00:13:51.920 company. And we do it doing it our way. Right? And like, that's, that's what I want to do. And 175 00:13:51.920 --> 00:13:56.640 whether it takes five years, 10 years, 20 years, like, it's a game that I'm dedicated to playing. 176 00:13:56.640 --> 00:14:01.120 And anything, like, I know the plan that we set out for. So we spent 18 months thinking of all 177 00:14:01.120 --> 00:14:04.320 the different things we can do. What do we want to do? We said, we want to combine social media 178 00:14:04.800 --> 00:14:09.280 and investing. That was the big, that was like something old and something new. And we figured, 179 00:14:09.280 --> 00:14:14.480 if we could provide you a deal flow and do significant value add to businesses that we can buy 180 00:14:14.480 --> 00:14:18.160 at good rates, and we can add value to them too. Because typically investing is one of the other. 181 00:14:18.160 --> 00:14:22.160 Either you buy really cheap, like, that's warm buff. It's strategy is buy really cheap. Right? 182 00:14:22.160 --> 00:14:26.640 Now he says, wonderful companies at fair prices, whatever. Or you've got somebody who's like, 183 00:14:26.640 --> 00:14:30.480 a really niche, like if you bought solar stuff, or if you can't, because you're a non-compete. But 184 00:14:30.480 --> 00:14:34.080 yeah, like if you, if you didn't have your non-compete, like you going into a solar business, 185 00:14:34.080 --> 00:14:37.520 it's like, well, you have expertise there. You'll immediately be able to, right? And so you don't 186 00:14:37.520 --> 00:14:41.120 even need to buy at a great multiple, because you know if you 10X, it doesn't really matter 187 00:14:41.200 --> 00:14:44.720 what you bought it at. So you're going to, it's going to be worth more. Right? And so for us, 188 00:14:44.720 --> 00:14:49.280 we try to combine both those things to create an investment thesis. And the problem with, and I, 189 00:14:49.280 --> 00:14:55.440 like, you're in the season now, right? Is that switching from business to investing is a massive 190 00:14:55.440 --> 00:15:01.280 change in mindset. Because when you're in business, you're used to selling on it, right? It's selling 191 00:15:01.280 --> 00:15:05.280 and promoting and selling and selling and selling and selling. But when you're doing deals, 192 00:15:05.920 --> 00:15:11.040 it's actually about trying to get to know, which is so counter everything that we've, like, 193 00:15:11.040 --> 00:15:14.960 you and I have had ingrained in our minds. It's like, yeah, I want this person to say, yes, 194 00:15:14.960 --> 00:15:18.640 but the thing is, is that like if you keep upping the price and changing the terms, then you can get 195 00:15:18.640 --> 00:15:22.960 someone to say, yes, but it might be a terrible deal for you. And so like no longer is about, yes, 196 00:15:22.960 --> 00:15:28.160 is it's about, you know, coming to agreements within a defined box that you define for yourself, 197 00:15:28.160 --> 00:15:32.880 that like this is a deal that makes sense. Right? And so that's been probably one of the hardest 198 00:15:32.880 --> 00:15:38.240 transitions for me going from business owner to investor, but an investment vehicle also 199 00:15:38.240 --> 00:15:41.760 doesn't give you the quick hits that business does. Like, you and I could rattle the sales team, 200 00:15:41.760 --> 00:15:47.920 and then boom, we'd see sales hours later, you know, coming in same day. I can't rattle the deal 201 00:15:47.920 --> 00:15:52.640 team and then like get a deal close, right? Like it just doesn't work that, right? And so there's 202 00:15:52.640 --> 00:15:57.280 just huge lag on when we start doing stuff and we start seeing the results. And so you think about 203 00:15:57.360 --> 00:16:03.440 like even improving a process. It's like it might take 90 days or six months to get through from 204 00:16:03.440 --> 00:16:08.560 beginning to end on a deal. And then we don't even know how the deal went. And it's going to take us 205 00:16:08.560 --> 00:16:13.120 another year or two before we really even see like, okay, this was a good deal. This was a good 206 00:16:13.120 --> 00:16:18.560 company. This was a good pick. So your feedback loops are so long you have to figure out games to 207 00:16:18.560 --> 00:16:22.480 play in the meantime so that you can let the big machine work. And so like right now we have a 208 00:16:22.480 --> 00:16:29.040 snowball, but I mean, investor years were like, I did my first deal in December, 209 00:16:29.040 --> 00:16:34.960 2020, so three years in. So like, in investor years, three years is like nothing. It's nothing. 210 00:16:34.960 --> 00:16:41.280 It's child's play. And so I had to really change my perspective of like business versus investing. 211 00:16:41.280 --> 00:16:46.480 And that's been a very hard thing to do, but it's changed me a lot. And I think hopefully for the better. 212 00:16:46.880 --> 00:16:53.200 Real quick guys, if you can think about how you found this podcast, somebody probably tweeted it, 213 00:16:53.200 --> 00:16:57.840 told you about it, shared it on Instagram or something like that. The only way this grows is 214 00:16:57.840 --> 00:17:02.080 through word of mouth. And so I don't run ads. I don't do sponsorships. I don't sell anything. 215 00:17:02.080 --> 00:17:06.080 My only ask is that you continue to pay it forward. Do whoever showed you or however you found 216 00:17:06.080 --> 00:17:10.800 out about this podcast that you do the exact same thing. So if it was a review, if it was a post, 217 00:17:10.800 --> 00:17:13.680 if you do that, it would mean the world to me and you'll throw some good karma out there for another 218 00:17:13.680 --> 00:17:20.640 entrepreneur. I love the distinction between, you know, running a business or being in sales or 219 00:17:20.640 --> 00:17:24.960 what not versus versus investing because you're exactly right. It's drastically different. 220 00:17:24.960 --> 00:17:30.560 I love the phrase in regards to what you're talking about aggressively patient, right? Like, 221 00:17:30.560 --> 00:17:37.360 just being aggressive in the moment, but very patient on any results, any lag, any anything 222 00:17:37.360 --> 00:17:44.960 that's going. And I think that drastically applies to both sides of owning a business and also 223 00:17:44.960 --> 00:17:50.800 in the investment world, right? Like I'm doing everything to increase deal flow and increase 224 00:17:50.800 --> 00:17:56.880 opportunities on one side. And the other I'm creating is many transactions, but not caring about 225 00:17:56.880 --> 00:18:02.560 the results. And just it may be boring and maybe maybe long and maybe, you know, suffering on 226 00:18:02.640 --> 00:18:06.800 day to day. And the interesting thing is like, you don't have to be an entrepreneur to apply these 227 00:18:06.800 --> 00:18:12.240 principles, right? Like you can be in sales. You can be in a career path. You can be in any one of 228 00:18:12.240 --> 00:18:18.800 these things where you just got to fall in love with the boring work, not get easily distracted, 229 00:18:18.800 --> 00:18:26.000 not looking for another opportunity wherever they pop up. And because it's the compound effect, 230 00:18:26.000 --> 00:18:30.960 as you talked about earlier, as far as like increasing your audience size, same thing as far 231 00:18:30.960 --> 00:18:35.840 as skill set, right? Like every, every month, every year that I'm, you know, hammering down on 232 00:18:35.840 --> 00:18:41.760 this one skill set, and it's just compounding. And then all of a sudden, the results come fast and 233 00:18:41.760 --> 00:18:48.080 quick at the end. Yeah, the amount of growth that your company had in the last year is probably more 234 00:18:48.080 --> 00:18:56.400 than it did in the first five years, right? And so like, yeah, like, and it's a, it's a top 235 00:18:56.480 --> 00:19:01.040 year shift. I mean, like, this is me just, I know you're in the process of this too. But like, 236 00:19:01.600 --> 00:19:06.880 when you go from comparing your, your 70 or eight growth of a business that you owned, 237 00:19:06.880 --> 00:19:12.240 to your, to your three growth of a newer thing that you're doing, it's like, we can't compare 238 00:19:12.240 --> 00:19:15.280 the two. Like, this is, this is, I'm just telling this is what's been hard for me that I've had, 239 00:19:15.280 --> 00:19:20.640 like, wrap my head around. Is that like, I'm like, God, like, it'd be so easy for me to add another 240 00:19:20.720 --> 00:19:26.880 like 10 million in EBITDA to the solar vises, right? Versus like, or in gym was like adding other 241 00:19:26.880 --> 00:19:30.800 like six or out another 10, whatever it is, right? Like adding that kind of like EBITDA, like, 242 00:19:30.800 --> 00:19:36.080 that can happen pretty quickly, right? Whereas the new thing, like, you have to think in percentages 243 00:19:36.720 --> 00:19:41.200 rather than in absolute amounts. Because otherwise, you'll just get way too bogged down. Like, 244 00:19:41.200 --> 00:19:46.720 you get way too sad about how things are working as fast as you want them to. And so that's, 245 00:19:46.720 --> 00:19:50.880 that's been helped to is the shifting from absolute to percentages to relative changes. 246 00:19:50.880 --> 00:19:54.720 And also just, at least for me, thinking that like, different businesses have different 247 00:19:54.720 --> 00:19:59.680 pain at different times. And so like, I'll give you a quick extreme example. It's like, on one 248 00:19:59.680 --> 00:20:04.320 extreme, you got like info businesses, right? There's lots of people who have this. The pain that 249 00:20:04.320 --> 00:20:08.400 you experience is when you want to get past a million a month, two million a month, three million 250 00:20:08.400 --> 00:20:14.000 a month. So you basically pick a vehicle that's easy to start, easy to make money fast for it, 251 00:20:14.000 --> 00:20:17.200 but you're not going to make massive money. Right? It's very hard to do it. Not to see, 252 00:20:17.200 --> 00:20:23.360 can't, it's very, very hard. On the flip side, you start a software company. And like, if you do it 253 00:20:23.360 --> 00:20:26.800 the right way, you're probably not going to make any money at all for a long period of time. 254 00:20:26.800 --> 00:20:31.440 And so all your pain is front loaded. But once you achieve critical mass, then the things just 255 00:20:31.440 --> 00:20:35.440 starts compounding on its own month over month or month, and it knowing from it will cost you. 256 00:20:35.440 --> 00:20:39.280 And the thing becomes a profit monster, right? And so it's like, those are completely opposite 257 00:20:39.280 --> 00:20:44.160 sides of the spectrum. And it's really just like, where do you want your pain? And if you know 258 00:20:44.160 --> 00:20:48.320 ahead of time, this is where the pain's going to happen, not being surprised when the pain comes. 259 00:20:48.960 --> 00:20:53.440 That is one of my favorite principles that I believe applies to every area of life. Your 260 00:20:53.440 --> 00:20:59.760 fitness, your relationships, everything is choosing pain now versus later, right? If I choose pain 261 00:20:59.760 --> 00:21:06.960 now, I experience real long lasting fruit later. If I choose pain later, I get fake fruit, 262 00:21:06.960 --> 00:21:11.840 short bursts, quick hitters, right? Like I hit the alarm clock in the morning, right? 263 00:21:11.840 --> 00:21:16.160 Hit the snooze button. I get a quick hitter in the morning, right? Like I feel good sleeping a 264 00:21:16.160 --> 00:21:22.000 little bit longer or whatever it is. But I mean, it's my fitness routine or whatever it is, you know, 265 00:21:22.000 --> 00:21:29.120 which below long pain is way, way more enduring, way, way worse. And so this principle applies to 266 00:21:29.120 --> 00:21:35.200 literally everything. I want to get your take on one thing. So I asked, uh, I asked Grant Cardone. 267 00:21:35.200 --> 00:21:42.560 It's really, really similar to this perspective that you're talking about is like, so the question 268 00:21:42.560 --> 00:21:47.840 I asked Grant and this, and I'll give you what he answered. And I don't want to hear your thoughts 269 00:21:47.840 --> 00:21:54.160 on it was a young guy. He's wanted to launch his wanting to launch his first business. He's thinking 270 00:21:54.160 --> 00:21:59.760 about taking, taking the leap away from corporate America, going and do it. What do you advise? 271 00:21:59.760 --> 00:22:05.520 Like what advice do you have for that guy? Grant said, he said, don't do it. He said, don't go and 272 00:22:05.520 --> 00:22:12.880 launch a business. He said, go and find somebody that has put in the years of essentially compounding 273 00:22:12.880 --> 00:22:19.360 and is pumping the brakes, going figure out how to partner up with them and leverage that compound 274 00:22:19.360 --> 00:22:25.040 that's already been created, right? And participate in the upside. And I think it's a lot of like what 275 00:22:25.600 --> 00:22:30.080 what you're, what you're talking about as far as like year seven through eight is way easier to 276 00:22:30.080 --> 00:22:36.000 wait, make way more money than zero to one, one to two, whatever it may be. And so with that, 277 00:22:36.000 --> 00:22:40.480 like, what are your thoughts on that question on that advice? I think that I will have slightly, 278 00:22:40.480 --> 00:22:45.760 a slightly different take in Grant. And it's not because I disagree with his advice, but because 279 00:22:45.760 --> 00:22:51.840 I think it depends on the context that it's given. And so I think that I mean to start over, 280 00:22:51.920 --> 00:22:57.040 well, for you to quote, start over, I have a lot of experience in business. And so for me, 281 00:22:57.040 --> 00:23:02.080 it makes sense to go partner with those companies and you know, let them have incur that first 282 00:23:02.080 --> 00:23:08.240 pass so that I can walk with them to the much bigger upside, right? It's just that if you have no 283 00:23:08.240 --> 00:23:14.320 business experience, one, it's tough to get that business owner to say, yeah, you're going to be 284 00:23:14.320 --> 00:23:20.000 huge value to my business. And number two, you've also probably like, if that person doesn't say 285 00:23:20.000 --> 00:23:23.840 that and you want to go to the finance route of like, I can route my friends and family and get 286 00:23:23.840 --> 00:23:27.600 a bank loan and then try and buy this business because I took a course on acquisitions or whatever. 287 00:23:27.600 --> 00:23:31.440 You still don't know what you're doing. And you don't know how to analyze what is a good business 288 00:23:31.440 --> 00:23:37.040 because you don't have a baseline. And so a lot of these things are, and again, I agree with the 289 00:23:37.040 --> 00:23:40.560 advice from my like, what is the best opportunity for you? I mean, like private equity is a little 290 00:23:40.560 --> 00:23:43.520 based on this. So if you get into private equity, you start a fund and you can go like a billion 291 00:23:43.520 --> 00:23:48.240 dollars and five years. But like, sure, all you got to do is raise a billion dollars, go buy five 292 00:23:48.320 --> 00:23:52.880 companies for 200. You know what I mean? Let them double naturally over time. And there you go. 293 00:23:52.880 --> 00:23:57.200 You made yourself a billion dollars. Like, sounds easy to do. Significant, right? What do we do 294 00:23:57.200 --> 00:24:03.680 in here? Right? Why do we start so much? But it's a lot easier said than done, right? It's a 295 00:24:03.680 --> 00:24:09.120 like rent at his station in life. It's not a conversation green. I'll give you a micro example of 296 00:24:09.120 --> 00:24:12.480 this. And so I was thinking about what I was going to do with our big hunk of money, right? And 297 00:24:12.480 --> 00:24:16.320 I want to give you two very different perspectives on the advice. All right. So I talked to Dave Ramsey 298 00:24:16.320 --> 00:24:19.280 and I talked to, sorry, I didn't talk to Dave. I watched a video of Dave Ramsey when we 299 00:24:19.280 --> 00:24:24.080 talked about this night and I had a conversation with him. So Grant said, go buy a massive building. 300 00:24:24.080 --> 00:24:27.280 He said, go buy the biggest building you can possibly buy. And that's what we should do. 301 00:24:27.280 --> 00:24:32.720 And I think the caveat there is that's what ranch because Grant's been doing real sick for 30 years. 302 00:24:32.720 --> 00:24:35.840 And so for him, him putting all his eggs on a basket is like, yeah, I can't lose. He's like, 303 00:24:35.840 --> 00:24:41.600 yeah, you just pick it and get a manager in there and done, right? Dave had slightly different 304 00:24:41.600 --> 00:24:49.200 perspective. Dave said, if your experiences and your skills were a pie, right? So think about 305 00:24:49.200 --> 00:24:55.520 a pie, 100%. He said, how would your experiences break down between like investment assets? 306 00:24:55.520 --> 00:24:59.840 So you got like stocks and bonds. You've got like, you know, the skills you had, you've got 307 00:24:59.840 --> 00:25:04.560 business, you've got crypto, whatever it is. How does that pie circle out for you? When I look at 308 00:25:04.560 --> 00:25:11.200 my pie, it's 100% business. It's all business, right? And so when I heard that advice and I talked 309 00:25:11.440 --> 00:25:16.080 to a lot of people, when I was in the like really the season, I think you're, you just entered 310 00:25:16.080 --> 00:25:19.680 right now, which is like the post transaction season, right? I talked to every single guy, 311 00:25:19.680 --> 00:25:24.000 I know it was worth over 100 million. Every single guy, I probably had, I don't know, 312 00:25:24.000 --> 00:25:29.520 only say minimum 40 conversations with guys who were worth 100 to multiple billions, right? 313 00:25:29.520 --> 00:25:33.200 And it was like, what should I do? And what the tough part was is that all of them gave me different 314 00:25:33.200 --> 00:25:38.080 advice. And so what they, what many of them gave me is they gave me what they would, right? And 315 00:25:38.080 --> 00:25:41.200 that's to be fair, that's fine. They're like, this is what I would do. This is lighted, right? 316 00:25:41.840 --> 00:25:48.320 But the thing is, it's like, you were not them. And so for me, I'm good at business. That's 317 00:25:48.320 --> 00:25:52.240 where all my experience is. That's where I can recognize risk. I can recognize value. I can see 318 00:25:52.240 --> 00:25:56.560 where I can add value. Like I can see all that stuff. If you put an apartment building that's worth 319 00:25:56.560 --> 00:26:00.720 20 million in front of me and you put a business that's worth 20 million in front of me, dude, 320 00:26:00.720 --> 00:26:04.240 I got to the end of like four different real estate transactions that were in the neighborhood of 321 00:26:04.240 --> 00:26:08.000 like 15 to 30 million, right? And I would get right to the end. You don't be like, I'd do all the 322 00:26:08.000 --> 00:26:11.360 other things. I had to get the project to solve stuff, right? And right before I needed to write 323 00:26:11.360 --> 00:26:17.440 the check, for like three million or five million, I was like, I don't know. I don't know. I've 324 00:26:17.440 --> 00:26:21.200 never done this yet. I don't know, right? And I didn't want to buy a tiny house. Who gives 325 00:26:21.200 --> 00:26:26.240 it right? Right? Why am I going to buy a thousand of houses? It's a waste of time. Whereas me pulling 326 00:26:26.240 --> 00:26:31.600 up to a business that's worth 20, me writing a check there for five million, I can do it in instant. 327 00:26:31.680 --> 00:26:35.760 I don't even need the complex project. I know I get the business. I know where the risks are. 328 00:26:35.760 --> 00:26:42.720 Like I know the termites, toilet tenants, whatever it is for that business. And so I absolutely agree 329 00:26:42.720 --> 00:26:47.760 that the best opportunity is leveraging what already exists and then going more, right? That's 330 00:26:47.760 --> 00:26:51.920 the entire private dignity industry. The hard part is I need to develop the skill set to get to 331 00:26:51.920 --> 00:26:56.800 that point. And so I think that's the new ones that I would add to, which is like once you have 332 00:26:56.800 --> 00:27:03.440 five years or ten years, and this is why, in my opinion, most businesses on a long time horizon 333 00:27:03.440 --> 00:27:09.920 become investment firms. Like they become on some level of it, they have to re-elke capital. 334 00:27:09.920 --> 00:27:13.680 Now, the first and obvious place that you re-elke capital is within the business. You look at 335 00:27:13.680 --> 00:27:18.080 how can we bolster out new product offerings, new business lines or whatever it is, right? 336 00:27:18.080 --> 00:27:22.240 And then the second kind of layer of investing is that you look at strategic acquisitions. You see 337 00:27:22.240 --> 00:27:26.400 if you can buy other companies that are that are creative or evaluate to your own business, right? If 338 00:27:26.480 --> 00:27:30.240 you can vertically integrate, I mean, your business is like an obvious perfect example. It's like, 339 00:27:30.240 --> 00:27:34.000 okay, well, if I can buy the financing company, and I can buy the manufacturer of the solar 340 00:27:34.000 --> 00:27:37.440 pieces and not just have the sales team, I'm going to have a more valuable business. Like that's 341 00:27:37.440 --> 00:27:41.840 an accretive acquisition, right? The third level is just saying, is there another place that I can 342 00:27:41.840 --> 00:27:46.400 allocate capital that will give me a higher return than my current state, right? And so 343 00:27:47.200 --> 00:27:51.280 all businesses, once they are successful enough, become investment firms. They have to make decisions 344 00:27:51.280 --> 00:27:57.040 based on returns on capital. And so I figured if that's where all businesses eventually lead, 345 00:27:57.040 --> 00:28:03.040 then that's what I'm going to focus on at scale. And so that's my two senses. Like, you got to learn 346 00:28:03.040 --> 00:28:09.040 a game. And then once you learn the game, then you can recognize where the arbitrage opportunities 347 00:28:09.040 --> 00:28:14.480 are. So you can unlock all the upside. And I'm sure that the many people who gave specific advice 348 00:28:14.480 --> 00:28:18.080 would probably agree with me on that, if given an extra two minutes, they asked the question. 349 00:28:18.560 --> 00:28:23.760 Dude, I love it. So, you know, the interesting thing is like exactly to your point, right, in order 350 00:28:23.760 --> 00:28:27.600 to get to a point where you can go and leverage a big business, you have to have the experience, 351 00:28:27.600 --> 00:28:31.840 you have to have the skill set. And there's really two different routes that you can go to get there, 352 00:28:31.840 --> 00:28:36.160 right? You can go the employment route. You can go as an employee. And I think if you're going to 353 00:28:36.160 --> 00:28:43.120 be as an employee, you're going to want to be an entrepreneur. And typically that's in a sales 354 00:28:43.120 --> 00:28:47.760 aspect, right? Like go and learn the product, learn how to sell, learn how to elevate it, 355 00:28:47.760 --> 00:28:52.880 try to participate in some long term incentive plan or whatever it is, but you're building a skill, 356 00:28:52.880 --> 00:28:58.240 right? Getting up to a point where then later you can leverage and where somebody could look at 357 00:28:58.240 --> 00:29:02.560 you and say, Hey, this guy can add value. I'd be willing to share in some upside to help me 358 00:29:02.560 --> 00:29:09.120 scale up or you can go the entrepreneur route, go and fail, figure out things, whatever it may be. 359 00:29:09.120 --> 00:29:17.440 And so I love your advice that like, yes, Grant, that's perfect advice after you have positioned 360 00:29:17.440 --> 00:29:24.000 yourself to be able to do so. And so that's just phenomenal stuff. Man, I appreciate you dropping 361 00:29:24.000 --> 00:29:30.000 lots of good bombs for my listeners. What's the best platform to follow you on Instagram, YouTube, 362 00:29:30.000 --> 00:29:36.000 where's the best spot? Well, if you're a podcaster, I podcast called the game so you can go out to the 363 00:29:36.000 --> 00:29:39.520 game with Oxymozzi. You can just like, yeah, if you type in Ormuzzi, you're probably fine. And then 364 00:29:39.520 --> 00:29:45.600 if you type in Ormuzzi on any platform, which is Instagram, TikTok, YouTube, Twitter, LinkedIn, 365 00:29:45.600 --> 00:29:49.680 and if you're a business that is doing over a million dollars even and you want to grow a lot more 366 00:29:49.680 --> 00:29:53.120 than that, then go to Acquisition.com. We'd love to see if we can help you out. 367 00:29:53.120 --> 00:29:59.520 Pretty can do. Last piece of advice that I want them will let you go. So somebody is just going 368 00:29:59.520 --> 00:30:06.400 through a tough time, whether it's in a relationship, business, like really, really struggling, 369 00:30:06.400 --> 00:30:12.480 wondering, you know, can I keep going? Like, is this even worth it? What advice are you giving to 370 00:30:12.480 --> 00:30:18.240 that person? Whenever I have the thoughts, like, why do I even bother? Like, why should I keep going? 371 00:30:18.960 --> 00:30:22.320 I just remind myself that this is the point where most people put it. And that's why they don't 372 00:30:22.320 --> 00:30:24.720 love that. Love that.