#113 - From Furniture Store to Water Delivery: The Millions in Boring Businesses

u yeah i feel like i could rule world i know i could be what i want to put at all in it like the days off on a travel never looking back ryan sam what's going on you know it's another day another another i don't know what's the phrase another day another dollar or something like that i that's sounds weird i just it's another day that's kind of the i'm in the phrase for me i have some stuff i wanted to talk you about did you see there's this blog post maybe a linkedin post by this guy by the guy frank s the guy we were talking about the sea of snowflake did you read this blog post i saw you link to it and i hadn't read it yet what's the summary it's amazing so so this guy frank lu who's the ceo of snowflake now but he was the ceo of servicenow which is public enterprise company and data domain which is another one he put this thing on linkedin which you know linkedin content not usually the best but he just wrote like kinda his philosophy on building a company and building like he's like was basically like look a lot of people will ask okay what did we get right what do we do differently is there some silver bullet he's like no not really he's like but he's like i think in most organizations there's basically like slack in the rope and he's like what if we did anything it was that we took all the slack out and he's he calls that amp it up he's like i just think you can amp up the pace and intensity in the company and here's how we did it here's how we thought about it wow this is long i love this blog post it was like by the end of it i was like alright i wanna work ten times as hard and i'm in on this guy you know i'm all in on this guy so i really liked it if you didn't read it you know hard to talk too much about it but a couple of the things that he talked about which i think we're were good was i i guess there was a couple of things that he talked about though were obvious but he said it in a good way and then there's some things that he said that most people don't say like for example he talks about diversity and inclusion and let me he says well he previously he goes he said something like fur on our ship you're included he has a few more great lines it says organizations are not getting killed by c players everyone knows who they are perform and the performance is eventually addressed the people who kill organize are your b players it's a scourge of the enterprise because there are many and they are generally accepted often they're seeing not as bad enough to fire but not good enough to keep they are the ultimate passengers yes exactly and he was basically just like a passenger is dead weight along for the ride and we shed that dead weight he talks about like for a players who talks about how they like they compensated the whole service exec team on one metric and it was the pure like kind of the performance metric of that of a cloud software company and he's like the board fought me on this they were convinced that a grown up company had to have a balanced scorecard he's like and this is arguably the worst idea ever to come out of academia which is which was say again i i didn't quite understand it can you say so i'll give you by the way look where i'm sitting i'm in an airbnb look at the award that is on the stuff like nice it's like some ballet thing i don't know it's not like a mock award okay that's great so so a balanced scorecard would be like oh you know the we're not just concerned about revenue we're also concerned about net promoter score and we're also concerned about you at user growth right all three things are super important we have three top level metrics and he was he's basically saying we had one metric that mattered everybody got commented on that like in most companies sales team will get compensated on sales maybe this safety team will get compensated on it you know we'll be assess their performance on a different thing altogether and you wanna have balance between you know growth and revenue and maybe like customer you know satisfaction or whatever and so he's like the board fought me on this they were convinced a grown up team had to have a balanced scorecard which arguably be the worst idea to ever come out of academia people say they want focus but their actions do not bear it out quite the opposite focus is hard once you understand what it really means it means what are you not gonna do and he talks about gender diversity and you know inclusion and he says we ran our companies for attracting and and retaining talent regardless of gender race or ethnic origin value you we valued people on the contribution to the goal not because they had the preferred skin color gender ethnic background either you're completely focused on your goals or you lend in all kinds of noise that dilute your limited resources i have nothing against inclusion as long as it results from the goal oriented mode of execution we are not a university or nonprofit this is business if you lack focus at the top you will be even more so at the bottom i just love this guys even though i don't know like i i actually agree with that point but even though i didn't agree with all his points i loved his just straightforward balls and i think this is a post worth reading i think it's great and i agree with that sentiment as well i think that was a i am i'm a young leader but as was a younger leader i was nervous to say that like dude all i care about is revenue growth and profit because in silicon valley it's like well like i knew these guys that i was two c cofounder and they like purposely were trying to hire their first engineer to be a female engineer and i was like why like well we need diversity i was like and so anyway like that kinda like stuck snuck in a little bit to my thinking that the diversity thing but the like we care about like this and that and this and all these unimportant things but i'm like man i i really don't care about this thing but i'm afraid to say it now what i've learned is that a lot of employees actually want you to be like that because they've all many have worked somewhere where they didn't give a shit about revenue and profit and they get fired or laid off do you know what i mean and it would one thing this guy says in here is basically like if you take a strong point of view on how you're gonna run your company you will just attract the people who want to be in a company run that way and you will repel people who do not want that in their company and it will be painful there will be turnover but at in the end that's like how you can high performance and so even at the the the very last paragraph goes this performance centric thinking does not trend well with with the prevailing attitudes of today companies have become more fixated on their employee mps score than their customers they cuddle their people they get caught up in little things that have nothing to do with their mission it takes conviction and courage to act like this as they said in brave heart people will people don't follow the title they follow courage you will be immensely popular when the good results come in that's all people want from you anyway is this guy was he the military what a old is he american i i've had hawk and he didn't have an accent but i thought it said he was like from somewhere i i don't know where he's from he's a he just looks like kinda like a like guy in his fifties i don't know he's he's dutch yes he i and then went and i was like oh shoot i'm i'm on the frank loop and train let me go to youtube and let me see what this guy's is all about in his talks and then his doctor horrible they're were very boring and he was like not well spoken at all i was like okay fuck that i guess you know i'll just like this blog post i i i saw some of his talks they were fine i saw his stuff when he he goes on cnbc and was talking about snowflake and he was not if i had just seen that i wouldn't be like this guy's the shit what an interesting person so that's what i've been asking myself like i know a couple people like that you know my friend roman is a he is very intense and whenever i'm rhonda increases up intensity i'm like oh man i could push it this could push it this hard right and then i love hearing stories about rocket internet do you know who rocket internet is anyone who's listening google rocket internet the hustle it's an article i wrote or you just google rocket internet i'm sure you could find a bunch of stuff two or three brothers who scale rapidly like they've scaled multiple companies like three hundred four hundred million dollars in sales and literally two years one they cloned ebay and sold it back to ebay in ninety days for fifty million so just in crazy intense and it is nice to i think be around that but i don't wanna be like that forever like i think even s was like i took off i think he said i took off i goes i have to take off two years up for each one yeah and i can see that you got a chill but i do like him i'm a big fan of him speaking alright since we're talking about people let's talk about danny meyer do you know who danny meyer is shake shack right yeah so i like him because he's from saint louis but i'm quite fascinated with like brick and mortar companies like i'm a little bored right now digital because i don't know why i just am and he started a restaurant when he was twenty nine old now so he was twenty seven twenty eight so that must have been thirty years ago or yeah anyway he started this thing called union it's popular in new york so all the new york people are gonna laugh at me if i don't know it it's is it called union square hospitality group i believe and they worked up to be have a chain of restaurants and then cater other place nothing interesting well no i mean it's kinda sexy hospitality is kinda sexy catering not but only restaurants says then partly that to shake shack and just a super fascinating fascinating guy because he has like an empire union square what's it called hospitality group it does that does like three hundred million and i mean it's like multi hundred million dollars in sales then he has shake shack which is three billion dollar market cap i just love these people who just have a lot of hits they're they're fascinating to me have you heard of the mel no so the mel are like danny meyer for chicago they have this group called let entertain you and so like lettuce like the food and these guys create they're they're unique because a if you go to chicago everybody knows the mel it's just like family business the brothers or whatever and let us entertain you they have a bunch of different restaurants all totally unique brands so only kinda like foodie know oh this is you know one of the new lettuce us entertain joints but they'll do like a bar cocktail lounge and then they'll do like a tiny quick service you know chinese bow restaurant like what called wow and so they have all these different concepts and they just make hit after hit after hit and when i was doing the restaurant thing we stopped on we we road tripped from north carolina to colorado which is where we're gonna start our first restaurant colorado and we literally drove like two days off track to go to chicago to try to meet the moments we had no introduction and we were like we gotta meet these guys we gotta see what's up and we ended up getting in touch with one of their guys this guy i think he's is jeff alexander and he took us around at three of his restaurants in the day and was given us kind of the like the the the the breakdown of like how they do it what they do and how they do it and what did they say so what's the deal what's the shit you know the thing i remember was at that time he was super interested in wow bow which was their latest concept and at it was really really small they only had one location i think with two locations at the time now wow bow is nationwide and has actually gone all in on on cloud kitchens but but at the time he was like look at this restaurant and we're standing there he's like this is a you know ten by ten square foot you know ten by ten restaurant he's like this is the smallest footprint you can do with a restaurant and we we started with that question how can we make a restaurant so small it could fit in this one towers of lobby whereas like there's only this tiny space that used to be just for like i don't know like greeting cards or something it like so small and he's like we just work backwards from that question they just had this like standard of excellence and they had this great culture and they had all these great people because once you started getting hits there's this flywheel where the best people wanna go work for you and so here's a sort of explaining like we cared about these things once we got momentum we par our momentum like this and when it comes to new concepts we just go completely fearless and we always try to do something unique and when we do something unique people wanna go check it out and wanna see it and it becomes you know that becomes the it builds the brand again and so i just like this energy i like the and i like that they had this little mini empire chicago that i never heard of what's it called i'm gonna write it down let us entertain you let us entertain you do you think those are good i mean you like that do you think they're good businesses or no yeah they're were doing great like you know they're big in the restaurant space which is not like by the way the lettuce it's it's lettuce like the food lettuce food oh my god okay i get it so yeah like a hundred and twenty restaurants or something like that and this is not in that long of a time i think they're yeah like open open on earth since nineteen seventy one like nineteen seventy one is not like this like hundred year old family business that's like one person's lifetime that they've built this empire and i think it's pretty according wikipedia three hundred million in revenue fifty million profit yeah nothing five though two thousand that was the two thousand five so it could be who knows we double that by now yeah or well not right now but who knows what it is prior to this year so you i don't you like you like brick and mortar now what else have you like in brick and mortar yeah i so here's what interest me okay did you see that thing i did well first of all let's talk about i'll talk about her in a second cia yogurt crazy fascinating to me do you know that guy it's you i think you've told the story him once on here before because he's like i don't know i'm gonna butcher but like somebody's israeli guy who started this thing it's the dollar company something right i think i think he's turkish turkish yeah as turkish ham yu kaya what name is turkish born american billionaire so oh he's turkey or okay sound american born turkish one yeah i thought he had a small accent came here he must have been he was not i mean he'd been here for probably a decade plus but then eventually somehow like saw an ad in the newspaper for a yogurt was it a yogurt no was a craft food factory that was for sale up in upstate new york and somehow was like heavy idea of i grew up in turkey eating goats using goat milk i believe to make yogurt and was like this should be popular here in america and he i'd have no idea how he finance this i'm pretty sure this guy doesn't come from wealth and started chap yogurt out of there and i think that he owns most of it i think that he's taken on debt but i'm pretty sure that he owns ninety percent of the company and it does like a billion and a half in sale that's probably one of the larger privately owned companies in america just a bad ass baller dude they now have a a venture like a fund that they invest in other companies they invested in kettle and fire my friend's business and just crazy fascinating and i think that there's something i don't know i think that there's something a little like sexy and cool about hiring the type of people who work at brick and mortar stores more so than dealing with tech employees you're such an all american for wanting to like do brick and mortar hire three thousand residents in a in a state and be their biggest employer and have a factory that's like so different than what i think is awesome and like i i think that's cool for people who do it i have zero desire to go that path but i feel like there's something that you love because you've read somebody biographies you're like yeah that's awesome well because i did it right i had a chain of hotdog dog stand so i did do it but like i had multiple locations but i will say that there's two things that you said there that are true the first is like be the biggest employer in a state that is actually cool i actually think that it's far better to be like the big dog in montana or the big dog in some small town than the medium dog in a big city or sure it's like epic that healthcare care company that has like a full campus in wisconsin and they're just like the shit in wisconsin and bought all the land and created like a university campus and yeah this is where we are alright i wanna take you a quick break to talk about start up investing you know i'm a big fan of start of investing i do it myself but there's many different ways for people to get involved and start up investing this week's sponsor our crowd is a new way that i just heard about you know if you wish you were early in some of the best performing ipo of twenty nineteen or twenty twenty our crowd investors were and you could join them to see what's next with our crowd any accredited investor can have access to invest directly easily and most importantly early our cloud investments have ipo like beyond meat or been bought by companies like intel nike microsoft and oracle today you can join our cloud investment in t a software start revolution how leading enterprise companies provide remote customer support you can get early into companies like tech or other companies if you go to our crowd dot com slash the hustle if you're interested in investing your account is free just go to o u r cr r o w d that's our crowd dot com slash the hustle so when a lot of people are like you know should i leave in mood to san francisco or new york or wherever whatever i'm like maybe but then maybe go back and like be the baller in like omaha or be a baller in you know birmingham like i think there's like way it's it's actually far easier i think to be the top dog in those cities then blue collar shit yeah i think it sounds cool but then if i a deal with them i'd be like to my fucking headaches but it does sound cool like from the on the on the surface to work with those types of folks the other one that i like is waste management do you know waste management the company yeah is this the one that that same guy owns like he's done like three or four of these huge ups yeah check this out the student's names wayne his z he's dead now but he originally started waste management as a young person like one it was a truck one truck that he like scale to like many trucks and then eventually waste management the plot of that story is that it's the greatest one of the greater acquisition companies of all time so they just bought other companies so that's not quite interesting but whatever it's cool he did they crushed it but then he went and started auto nation which i think today is the largest reseller i think it's the largest used car dealership in the world then whatever that's great killer then from there he started blockbuster who would have thought and then he owned like the carolina bought this guy's book i haven't ready yet but badass ass yeah yeah so we started care then he owned caroline panthers and dolphins and all that so i like waste management as a brick mortar thing because i actually think that i think that there's still some room in that space because like particularly in recycling you know that most recycling like it's just don't away like yeah boost trash basically like pretty much all of it so like that's kinda of fascinating to me and then finally did you see the tweet storm my little i did about this lady named rose this lady who owned at omaha or what is it no nebraska furniture mark no russian lady russian or no sorry bulgarian bulgarian and jewish lady came over here when he was forty five started a furniture store really small built it up to hundreds of millions since a day it's a one page agreement they just shake hands on it he doesn't audit any numbers at the age of eighty nine she sells to him for like a couple billion dollars then she works at her four more years at the age of like ninety four she her family is like look you gotta retire retire for three months and it goes fuck i gotta get back into it starts a competitor down the block and warren buffett also buys that because he didn't have a non compete clause in her contract because he was like well she's just gonna die never made the ninety year old lady she she might still have another run in her okay i like that that's i mean just amazing i a pretty remarkable story for that lady when you're saying you like these caveat what does that mean that means i like hearing these stories that means i liked i wanna do this that means i wanna invest in this that means what what does that mean i think that i get in lately i've been so bored just working behind a computer at a desk and i'm like i wanna be able to like and i wanna i wanna be able to see what i'm making and touch it and i find that to be kind of fascinating have you ever have you felt the same no it never felt that and anytime i've been in that position whether it's like doing a brick and mortar restaurant or an e commerce company that has inventory i hate it i hate every aspect of it we're just having a ton of employees hate it hate that also so i feel zero urge to the grass is always greener that's for sure yeah but maybe maybe that's me i mean obviously a lot of people do businesses like that they love it so it's you know to each their own but let me give you an example of one of these small local businesses that i think would be a good business to start let's give an idea out here so move to the be and you know had this problem i almost hesitate to even say it's a problem because it's so minor we moved out to this new house and in the fridge of this new house there's no like built in water and that's alright we used to use a brit but then our brit doesn't fit in this new fridge which sounds like nothing but what that basically meant was that we never had cold water for the first like month that we lived here and i only drink water i drink no soda no coffee no nothing i only drink water and so not having cold water was kind of a fucking buzz kill and i was like and it really highlighted to me that like most of the things that like change the like quality of life are these like small irritants that happened frequently rather than like big things that happen infrequently so like needing water five to ten times a day and not getting not having an easy way to get it was kind of annoying and so i was like alright i'm gonna buy one of those like water dispenser things that you get like if you go to costco it's like you know there's a there's like a tower and they deliver jugs on your doorstep every so often and i went to the website to go buy this thing and then the website looked ancient this thing called ready ready refresh or direct for refresh or something like that and and i was like this is great this subscription water company they're gonna sign me up and like you know they probably have this like a local monopoly in my little city here and there's it turns out there's two companies that service everybody who wants this in our sit in in my city and they i bet what do they called so the one is called this ready fresh i don't know the other don't remember they're other one off top of my head but i it's like ready fresh or ready refresh but anyways i was like this this has gotta be a great business right because i'm paying four you know forty bucks a month for the rest of my life and then so will the next household in the next household in the next household and you know i bet these businesses can get to like kinda low seven figures per geographic area and that might be either something that you could improve on because it's not like the customer experience is great like the dispenser looks crappy and cheap and the the website sucked and you know there's not like other options i can't do anything cool i can't get like i don't know flavored water or like smaller jugs or whatever there's nobody competing with them it seem like nobody nobody modern risk competing with them dude there are okay so when i was a kid we had this thing called c again you know what that is no no let me google what was your thing called i wanna make sure it's the same thing i'll find the name ready what's it called ready fresh one word ready refresh ready refresh dot com wait let me look at these things okay so yeah okay same thing so when i was a kid we had this thing called the call what's it called call c again yeah c again okay so it was like yeah it was like a massive jug i don't know how many gallons that must been ten or twenty gallons of water and you put it on that machine right and then that machine okay oh this thing looks cool this c machine i like this yeah dude i looked it up these are huge c bought their competitor for one point one billion dollars so these aren't like tiny ass things these are massive i mean let's see so do they do they just make the device or they are the local service provider you have to rent it and so it's a you how did it work i was a kid i think it was only ten dollars a month like so okay here's the thing so if i'm a d player so let me go to let me go to the facebook ad library again does c again advertise on tv and shit yeah yeah not tv i'm talking about the the new tv well i don't know i don't know if they do it basically how much has it even cost i don't even know i i don't see c again advertising but also my ad library has been broken so i don't know if it's gonna be working at all bra you i don't know if you have access to add library for some reason my accounts like fucked up but check if c again advertising i think somebody should make a d version of this and have subscription revenue coming from you know a basic utility that you're providing so what their what c is famous for is they have so it looks like it cost like ten or twenty thirty dollars a month so they have it it was real famous they have the c man so like they have all these trucks and i think that was their whole ad campaign was like say hey to the c man or something and this guy would drop off water to us every two weeks or however much it was i think so i think it's a a far bigger operate like it's a it's a far more challenging operation than we think because it's pretty expensive for the customer or do you mean for them sorry not expensive but not i mean like it's it's it's a sync it's a five gallon bottle of water can you ship that to deliver no no you can't ship you have to have local delivery people yeah dude it's like a big i think it's like a big deal yeah yeah so that's not really so they're running two ads as we can see yeah i i think yeah sure you have to deliver water bottles that's fine do it that's great it's a pretty it's a fascinating company or maybe even just be an affiliate maybe you could contact the local provider and be like how much will you pay per customer and i'll just do the marketing engine on top and then i'll you go fulfill it but the the and the truth is is that like i had one of those machines you have on those machines they're really awesome they're like the best it's a game changer i love it i i got one own taps like cold water on deck and it's always cold and if you want it to be hot like the evening hot right like instantly super hot and i don't understand how there's like no machinery inside the damn thing it's like a plastic like and it's not even that boo like i wasn't rich throwing up and we had it from the day i remember like we've always had it at my home right and it and it was off them the that's the one thing that i didn't think was great about this if i was gonna do this as a business because the price point was kinda low like each of these giant jugs so the the five gallon jug is eight dollars so that's like you know this just doesn't seem like a great like great value when bottled water or like you know one bottle of water sells for like four dollars alright let's talk about another one this one's get went viable today and i have an opinion that very few people that i've read have but that's obvious it's called civil it's spelled really dumb iv v v so i what it is so the haters which i actually who cares what i think but the haters explain it first yeah the haters call it uber for eviction and basically what it mean what what it in reality is is you hire people to do process like what you like serve people court documents like an eviction and so landlords are using it to a vic people but i believe they also clean up a house after attendant has left it in a really bad state but they also do they definitely like send a eviction they serve papers they post eviction notices they do clean outs for closures and they do eviction stand with standby extraction which looks like a cop that takes you out of the place exactly and it's all on demand and they seem to be doing really well they they're hiring people like crazy to do this when you say this went viral you tweeted something about this or it like vice covered it and a business insider and then we'll probably cover it a lot of people have covered it gotcha interesting and and this is not a silicon silicon valley company this is just like certainly doesn't look like it but they i mean like it's so dumb the way they spelled it ci i v v l civil i thought you're gonna say the idea was dumb or no yeah makes your bad just like it's so dumb the way they spelled it yeah it's so dumb does nothing think there's someone off more than this saying but it looks like what it looks like is like a non silicon valley guy thinking that he has to play start and also this website is like completely bogus like there's no like about there's no like terms and conditions there's no like there's no anything on this website it's such a simple ass website looks very cheap it looks like it crashes i bet it goes well yeah this is obviously gonna do well it's fascinating right so i saw that that was kinda cool and it kinda remind me a banner man do you know banner man that that was a uber for bodyguard right yeah which we used i used one time for for an event or what yeah well you need security for like and when you rent certain event venues you the you have to have the security team and i don't think that company did well or does well but i kinda like these little small things maybe i clicked be hired as an eviction crew i just wanna see what their their process is here to become a a victor this should just make you submit a photo that should be the whole the whole we take your shirt off and take a photo of what i what i was trying to think about was like the repo reposition industry like surely that's huge right like there has to be massive companies i mean i was doing i would do research one time i got like i hit my head even know when i was when i was twenty one i like we were skiing and i like felt ain't so much well yeah we're like i was on a company trip when i you said when i had a job at apartment list and like i fell and hit my head and had to go to the doctor and i thought the hospital i thought the apartment was covered it turns out they didn't and it was on me and so the collections agency was calling me and i was doing research on them and i couldn't find anything about it but i can tell by how many people were calling me and how many people were in the background that they had hundreds of people working there right i was so curious i was it was called like account services like that was the name of the company right right and i was so curious and i'm like i get why they don't have anyone any information out there i wanted to know all about it so there's another industry that's like this no i don't i haven't fully looked into this so i'm gonna talk out my ass for a second might be wrong on some of this but so the student debt market is really interesting to me because obviously there's like whatever a trillion dollars of outstanding student debt or something and student debt the reason we have so much student debt is because you know i forgot when it was thirty forty years ago maybe fifty years ago the government basically decided everybody has the right to an education and therefore anybody who wants funding anybody who wants debt for for for university can get it right and so you know university universities like university of phoenix they make all their money because you can use the you know student debt to pay for university of phoenix and they basically just convince you to do that rather than paying out of pocket and then you know you you can't even like declare bankruptcy on your student debt and all that good stuff so in terms of paying back student debt because you know fannie mae and freddie mac are the issuing agencies they're the ones who i think originate the loans you they don't collect and so there's a like a some absurd amount of money two or three billion dollars a year just in collectors fees for different agencies that go out and collect student debts okay and so so so just in the fees for collecting was multi billion dollar multi billion dollar industry i don't know if that split amongst tons of small companies or if there's some large ones i would expect some some kind of split but i found that to be quite interesting would you do that been driven today if it was like if it provide you a good lifestyle would you do that now no before yes so i'll just say like before my general philosophy is like yeah i'm not like up at about what business i pick like i go for a business that i think will work and i have fun building it now i've realized well i really get time to do so many of these in my life and there's a whole bunch of things that could be successful might as well pick the ones that i'll enjoy versus ones that i probably won't enjoy bring me know like you know satisfaction or intellectual stipulation or i shouldn't say that but there's low creativity type businesses and so now i i i prefer to find one that does both that i enjoy and can work i don't think i could do it i think that even though like i hate well when i hate when people say like you know we gotta forgive the debt and i'm like well i mean dude if someone fucking takes alone this pay back like just you know you're an adult you gotta to make your just even if you're close to adult you did it anyway but i wouldn't wanna be doing that all day i would just wanna kill myself like how about i like like hey pay me my money like i just would hey doing that it would be so exhausting i don't think i could but you're not necessarily the one doing it so really the question is would you want a company where there are people who are doing that in your company and that's the problem you have to think about but that's not a reality you know because even even if you hire people to run shit you starting sump when you start something you still have to like be heavily involved yeah when you start that's that's true but pretty quickly you can hire out of those sort of repetitive tedious tasks you know if you're you're doing it right so okay yeah i i feel you i to find out we have probably one more topic okay i can tell you one thing but i don't know if you're gonna be able to contribute to this but maybe go for okay so i saw these snowflake things and unity and like these b2b b companies are crushing it like getting valued like a hundred or no not a hundred yeah maybe a hundred times north a hundred times revenue was just like killing it right versus i have a beta i guess my company's both i mean we some of our customers are advertisers who spend north of seven figures some are trend subscribers who spend hundreds of dollars just small anyway the difference between selling through salesforce and large ticket items versus consumer i've been thinking about which is the best and i do think that the business model that you choose i just read this great article that agree that said this and i just kinda stole it the business model that you choose dictates the company culture and it dictate dictates like your lifestyle things like that and the business model is basically do you want customers who are spending you want a lot people spending a little money or a little people spending a lot of money and what is your take on which you prefer okay so prefer i think is the right thing because you said you were you started by saying which one is best and i was gonna be like well no it's like saying what's better a plane or a a car what's looks like what well it depends what you need right right but then it's like do you prefer to fly or do you prefer to go a road trip okay that's actually you know the question i can you know try to answer i prefer consumer by far i think consumer is more interesting more fun in terms of building myself in terms of investing i love investing in b to b because why very very strong very durable companies because the inertia to switch once your company has decided to buy a thing is you know it's just so strong it's so hard to get companies to change the services they use they're they have big budgets and it's also hard to get them to use it and generally speaking so generally speaking i think that b b companies are able to ramp sales quickly and very durable now there are certainly consumer companies that are that are similar so this these not really like that useful at this level of abstraction but what i'd say is for me personally i like business models that require very few people that don't require you to create new things all the time so i like software more than content i like software more than physical products i like software that's given to a small set of customers that are self serve rather than sales in order to to generate revenue so you know for example i would rather pill build a dev tool that is basically used by small developers who pay a subscription and they discover it because when they google for something or they read a blog post they find my tool why would you prefer that though because then the likelihood the likelihood that they churn and the likelihood that the pay little bit of money is quite high i think most subscription things have low churn in general you know it's it's pretty rare to like most subscription business i see that have churn it's still better than consumer sorry than businesses that are non subscription that are sort of you know do your way off base what do you consider to be a good annual churn well i usually think about like monthly alright what are you about monthly so you know if if something is churning less than two percent monthly i'd know that that compounds and it's like that's a two even two percent monthly would compound to become a quite a large number of things most things that a person just buys like those exceptions like it i'd atlas like a crazy exception slacks a crazy exception but they even they have a sales team but most things like for example convertkit which is the site i love you know convertkit yeah you can google convertkit bare metrics and you can go and look at their churn numbers and they'll tell you anyway churn for a lot of these small so if if your self serve you're gonna be small to medium business focus more likely than not and your churn will thus be higher yeah so like so i guess what i'm saying is if i could pick software or so let's just compare to business models d e commerce which is a popular you know don't thing a lot of people are doing or a saas dev tool d e commerce well i have to continually buy per so it's gonna be very capital intensive d to e commerce i i'm not on subscription so i need my customers to remember to come back and repeat purchase and a repeat purchase rate might be like thirty percent of my customers ever come back and that's like a healthy repeat purchase rate versus in saas i'm gonna have ninety eight percent ninety nine percent of my customers from one month renew to the next that's of just a much healthier monthly you know return rate you know so software over physical products subscription over non subscription these are my like rules of them and then self serve over salesforce that's just a preference because i don't wanna have a lot of people in my company and so i'd rather not have a sales team i'd rather have i'm gonna i hear that for lifestyle preferences it's gonna be my goal to convince you that you're wrong over some period of time i think that having a sales team is like the greatest having a sales team creates demand if you're a business owner and you just don't wanna deal with it i get it that's cool i don't wanna deal with it a lot of times either but in terms of creating revenue dude it's the best okay i i can see that now let's take you know convertkit right here convertkit no no sales now salesforce right i'm on their dashboard right now yeah two two million a month in recurring revenue yeah great company great company and they're generating all their leads from some combination of seo content maybe some digital ads word right like for and i just think this is and let me try to find their churn because you talk about it okay so they're at four five percent four point nine percent per month high for a saas business to to churn five percent of your user base per month revenue churn is four point five percent now and look at this active subscriptions line that's great just going up anyway so i i i i think yeah sure maybe maybe that's if ever work out the sales team my company right now has a sales team yes that's true i guess like like here's what happened at our company and i've talked to someone people that it said the same thing so i some people think i'm a sales guy i fucking hate salespeople i mean i don't hate them i love our guys but like i i i hate what it represents of like a bunch of like slightly overweight dues where jeans that are too tight with with brown leather shoes and like a collar shirt tucked into their jeans and like a slick hair right is that like the what every sales guy looks like not the overweight for that i it's not been in my experience but yeah they are like a lot of bros but was like bros it it's like a thirty five year old dude who like has got a little bit of stuff definitely the loafers first definitely the loafers first definitely the the color shirt tucked in yeah it's like like i see you from a while away and like you're gonna like why it die me and talk about all this shit that i think is just fucking bullshit and you're probably good at your job whatever that's how i peg it and i'm pinging them as accurate by the way that's how most are but i love i thought you're were gonna hedge instead you fucking get double down right from the moment at the like they're all that way no i'm right they're all that way but they're guys guys mostly like our sales guys are all like that but they're are like good hearted people so we could accept that anyway i sold the first quarter of a million dollars for the stuff at my company and i was like i wanna hire salesperson like they're obnoxious yada yada yada and then we hired someone and he was like yeah we're gonna go get three more i was like this is like you guys know like you're just gonna drink beer and you stop working at four pm and i sold the first quarter of a million and then after that i had this like base where was like alright i think it would work and hiring a sales team it was like putting a match onto in in a barrel of gasoline it just it just like went up significantly and i was like oh my god you guys totally drew up demand you totally created demand another person that said this on a great podcast was either the founder of squarespace or the founder of wix i forget which one but one of the websites builders i think it was squarespace space and he was like oh or maybe wordpress like one of these website developers that's created by a tech guy who like his anti sales and he's said the same thing and he was like i was so anti sales because all the reasons i just but they created demand and it's awesome right and i think that's how most people feel and i get it but they should get over it yeah i think i think that's a good point the salesperson i want is you know a hundred and twenty five pounds soaking wet sitting behind a laptop with facebook ad manager open and has you know three people in the philippines and in india making ad creative for a product that don't even know what the heck it is and ever and they're controlling you know a a quarter million dollar a month budget your sales person board i'm on board i just don't think you're gonna do that with a software product i mean if only fans of software then yeah you could do it with only fans but can you do it with something that costs like hundreds to hundreds of thousands of dollars a year no i don't know i don't think you you can't do it on high ticket items that's true but again you don't have to build a company that's based around that so so you don't have to but i hey look i'm i'm team nerd all the way i just i do wanna you've had an amazing experience with your sales team i i appreciate that i think that's awesome i love how much revenue y'all make that's great and i think for if that's your win presented that problem then you gotta take that key off the key chain and be like cool that's kinda of my my general mindset is you what is that analogy a door is locked you gotta unlock it so you gotta find the key that fits that key hole so where did you make that up put it i don't know my head i was just thinking about like you know you gotta use the tool to solve the problem that's kind of interesting for you guys you had that problem so you found the key that unlocks that that door if you're saying hey at the beginning of your business you can choose because you kinda know which key you're gonna need i like the blue key and i'm gonna choose businesses generally that do that unless i just love an idea so much and then of course i'll pick whatever business model makes sense for it you know totally well do we have anything else to say no we gotta roll out of here cool okay good upset i like it i'm gonna keep my eyes peeled for more of your brick and mortar stuff because you've that's what you're interested in now nowadays today i'm gonna keep my eye open for cool i think it's cool you know and typically they seem to be like i love the immigrant entrepreneur even though i'm like the exact opposite instead of him there's a guy dm me right now that has this flooring company has spent a couple million dollars a year and he's like we're gonna get to a hundred he was just like you raised how much money for what like dude my flooring company is gonna get to a hundred million dollars and everybody needs floors he's like going off about flooring i mean is right he's probably right yeah he's he's he's absolutely right guys have to check out a blue collar millionaires on cnbc it's it's a bunch of stories show yeah and it's everybody who's made their money off like blue collar jobs like flooring roofing all that kind of stuff the greatest company that we had was or one of my favorite companies that we had was one eight hundred got junk and you know when people hear this i think some people are gonna be like wow sean and sam discovered what businesses is yeah yeah i that all the time it's like dude i know we're just talking about it the the reason we're talking about is not like dude did you know there's flooring companies that are big it's more of we're trying to break our own filter bubbles sometimes and be like yeah we're always thinking about this and all of our friends do x oh but there's a whole other world of why that i'm in i'm obviously i knew about but i'm getting more and more interested in i'm meeting more cool people i'm hearing more stories about that thing because i'm just that's where that's the flavor of the month for me right now and anyone who wants a criticize like sean do you know what my parents do ever told you that they're like kind of farmer brokers right did my dad started a fruit stand that like it's like eventually expanded to like selling wholesale but like my parents are like this is what i grew up around like i grew around truckers and fruit stand like at produce shit so like it's like fannie anyone who's like make it fun of like a tech bros like i grew up around this shit so i know it it's just it is fun to you know jumped from bubble to bubble to bubble yeah exactly cool alright we gotta roll out of here but good stuff