#97 with Andrew Wilkinson - The Warren Buffett of the Internet Returns

what up everyone today we have andrew wilkinson he's been on here a bunch of times we don't need to do a proper intro other than andrew started this thing called meta lab which he has spun into tiny which owns like ten or twenty he just owns a lot of stuff and he's really interesting i am moving tomorrow out of san francisco we've talked about this a lot i'm moving out of here sean i'm gonna go to park city and then i'm gonna go to saint louis and in new york and then i don't know along the way i'll be doing this obviously and i'm i'm gonna take a little bit of an academic nerdy approach to it where i'm gonna like i'm reading these books and i'm gonna outline like what is like the most desirable like what are the attributes that make a happy neighborhood i'm a and i'm i'm am on a mission to find that neighborhood there's some movie i know if you've seen it there's some documentary about the happiest city or the happiest society it's like in sweden or something like that it's just like very communal living you know what you guys know what i'm talking about i i i'm only remember there's isn't isn't saint louis of a bp or whatever in california the happiest place in the united states i think it's sunny like san louise obi yeah yeah yeah yeah have you checked that out i have but here's why i don't think so i actually think that people over overestimate how much weather impacts them i'm almost positive that the number one attribute is your tribe yeah can you have a tribe by people i think it is your tribe but i think whether it's like two or three like i think it's i think it's way up there because just spending time twenty where i live in canada it's like you're always stranded by nature it's free it's up freezing cold it gets shitty and rainy probably like half the year and then it's beautiful and sunny the other half never too hot never too cold and i fun just having the contrast i don't know if i'd be happy if it was always sunny i talked to people in la i feel like they just don't appreciate it yeah i've grown to actually hate san francisco weather i want really hot or really cold but andrew you have family up there right yeah yeah i i up here and i hated it i thought it was the lame place in the world and then i started traveling and i realized like holy crap this is the most beautiful place in the world and it's awesome and it's exactly what you said i have a tribe i have all these amazing entrepreneurs i meet up with every single week i have great friends i've got family here and now i wouldn't go anywhere else but before i had the tribe i hated it and sean has a tribe in san francisco so he has reason because because i lived in so many different places i think i lived in like ten ten different countries or something like that and people always was like oh would you which ones you like the best i'm like well literally my whole experience was just a function of like who i hung out with and i had great friends and my family was around i had an amazing time it didn't even matter what the city was and if they weren't there again it didn't matter how sunny and how many beach beaches they're were worried looks like i used to i used to work in a cell phone store and it's a shitty job it's an objectively shitty job like literally on welfare wednesday you're dealing with all these like rude people who are addicted to drugs and it's super stressful but i worked with all these awesome people i mean we all had fun and hung out and i love it right and so i think it's the exact same thing doesn't really matter what the settings are the people are awesome andrew have you heard of this thing called hello i think they their url is hello landing and their url or their url is hell landing it's called landing and what they're doing is you pay an annual fee of a hundred dollars and you get access to a ton of furnished apartments throughout twenty major cities in the us and you can stay there for a monthly fee and as opposed to twelve month terms have you heard of this and what's your opinion on on on this type of business yeah i mean it's fine like staying in a hotel sucks i travel for work when there's not a pandemic or whatever so i understand the appeal of something like maybe a little c but i feel like it's kinda like these people who talk about like van life and clarify that like in reality i'd probably sucks not having your friends and family around being cold not having inconsistency this is maybe a nicer version of that but at the end of the day i wouldn't wanna live that lifestyle where i'm just bouncing from city to citi like what you're talking about doing is exciting because there's a purpose and the purpose is at the end of a month or two months you're gonna decide where to live but it's mean maybe if i a business traveler i'd be stoked about it but i hate traveling i'm in the same boat and i actually had a question similar to that i've read this or in the same vein as that so sean have you read when mark and dr or i think you told me about this so mark jason famous investor guy said something like warren buffett talks about seas candy and he kinda like with with the disdain said like i don't wanna build sees candy i wanna create the next scientific candy that's gonna blow them out the water yep and what warren buffett is betting on is that change won't happen what i'm betting on is that lots of change is gonna happen and andrew what i would you you're like a technologist and an internet guy like us but you're would you say you agree more with buffett on that if you had to pick one or the other yeah i mean i think it's that there's that classic e b white quote or whatever where it's like i i wake every morning trying to decide if i wanna enjoy the day or make it better and i think i've really embraced i just wanna enjoy my day and i'm gonna leave the her task of innovation to elon musk and all sorts of other people not said don't wanna innovate and make improvement but i think making real changes really hard and that most people who set out to do it just have unhappy lives and fail because most people who try to innovate fail so i'd way rather own ten car dealerships and sit on them for fifty years live a nice life have lots of kids live somewhere i like hang out with my friends then spend fifty years trying to innovate and do something crazy in launch rockets at mars but have a miserable life right i'm glad people like elon musk exist but i don't really wanna do that personally how long did it take you to be self aware of that because nearly everyone i imagine originally sees like an elon musk and they're like that's the best you gotta do that right yeah and and maybe they're like this is this kinda sucks and i i i don't i don't know probably like you guys like i grew up worship shipping steve jobs and read every single biography of him and as i read more and more biographies i just went like wow like everybody he worked with thought he a genius but also felt he was an asshole he didn't seem super happy it seems like a really stressful path and like again it's like holy shit that guy like transformed all these different industries and did all this amazing stuff but at the end of his life like is was he happy did he enjoy all that time or did he not know his kids or i mean i don't know i i've no insight to that but to me it just looks really stressful the it reminds me of two things one is that quote like i think both mark and entries and warren buffett or right they're just playing two different games and so if you try to apply one for since one person's strategy to the other person's game they would lose and and so in the same way that like warren buffett famously has you know rule number one of investing don't lose money rule number two don't forget rule number one right and then if you go in the startup world or the technology space and you try to apply that you'd be the worst venture capitalist the worst angel investor that anybody ever seen because the actually the nature of the game of high tech you know rapid growth investing is to make ten bets lose on eight and have two return you know ten to a hundred x or more and if you try to do that without losing money if you try to be a value investor in the start world you'd just be sitting on your ass the whole time wondering why these two kids with a half baked idea are you know saying they're worth ten million dollars prem money right like it it just doesn't work so you gotta know which game you're playing and choose wisely and go ahead andrew in the world's worst the world's worst if they on both exist right you need people like buffett to be a steady hand and make sure that those businesses are well taken care of once they get scale and they don't need to innovate anymore but then if you don't have the people innovating on the bottom we live in a boring shitty world technology ultimately makes everyone lives better makes everyone richer you know we all live like kings compared to help people did a hundred years ago even the even the poorest person today is way better off so you need the innovators i just go man i'm not built for that i know i've no i've gotten to know a lot of those people they're amazing but i all i often just go like wow there's a lot of personal sacrifice here they're forty five and they don't have kids they are super stressed they're sick all the time they don't sleep etcetera i i just i just don't wanna do that and i think at the end of the day i think we all know that the world's super competitive and if steve jobs hadn't done the iphone a year later someone else would have right or samsung would have done it it would have sucked and then it eventually would have evolved and gotten to where it is today right so i i just think fundamentally innovation is a competition and there's hundreds of people competing if it's not you it'll be someone else i don't think you have like this mission and duty to do innovation yeah you don't have to play that it's sort of like the way i think about it is okay what's the purpose what what like not what's the purpose of life but what's the purpose of your life and like i'll if there's three kinda high level goals that i can think of maybe there's more maybe it's like a fourth one that's religious in some way that i'm out of to my blind spot but the the three that i think about is okay my overarching goal is to be happy right that's one and it's that andrew sounds like you're sort of in that bucket enjoy my life have the highest quality of life i can possibly have the second one is i wanna make the biggest impact or con contribution to society the world or someone's you know the world at large and so if you chose that path you would wanna be you know curing diseases you'd wanna be you know advancing humanity forward removing scarcity all those things because you think the highest calling for you for yourself is to contribute in some way and then the last one might be the highest calling is to win and to push yourself and challenge yourself as much as you can and you view life as basically a series of obstacle courses and in doing them that gives you the most pleasure and meaning to your life there might be a fourth one which is like you know to to spread the gospel of jesus christ so i don't know whatever but those are the three that i know about and as i look at the people around me i could just see oh that's their track they've chosen the track of impact contribution they've chosen the track of quality of life and they've chosen the track of of winning slash competing slash challenging themselves and i am at a point in my life where i'm now realized that this is the case this is the frame i this is the best frame i can use to describe the world and now i'm deciding which one am i gonna go into which track am i gonna go into well there's so many different ways that you can contribute to that track right you look at it and go okay you could be the guy who invented the burrito or you could be the guy who created chipotle or you could be the ceo who took chipotle and made it instead of one place that was really awesome fifty places that were really awesome and you think like every single part of the management and growth that business someone got inspired by it right and so if you're just the the boring steady eddy guy who took it from five locations to fifty yeah maybe that's not as innovative but that also inspired all the innovators to go create a whole bunch of new burritos because burritos are hot now or whatever it is so i think like everyone's contributing in their own way and it it doesn't matter you just just own your strengths and do what you wanna do when i say wanna live a happy life that doesn't mean i don't wanna be socially responsible build great businesses make them as big as i possibly can i'm just not gonna go and you know try and build the next great business in vr i'm gonna wait a while and wait for all those guys to figure that out and then maybe i'll do something there well let's talk about what's interesting you at the moment you guys andrew has been on a bunch of times so go and i think his episode might be like a top three or five most listened to one basically andrew started this agency in canada that was being incredibly successful and he use the profits to buy more companies and so andrew at this point how many companies do you guys either own part of or fully so we about thirty thirty something like that and we've invested in about another eighty businesses just under a minority capacity like venture and so what and and you're just you me and sean are all incredibly similar where we have this ad adhd where we just like to jump around and look at new things even if we don't ever do it it's just exciting for us to geek out what what are you geek out right now for a few months ago it was cat furniture and it's always been it's been podcasts thing podcasting software what now so i it's been interesting so you know i spent twelve thirteen years running all my businesses super stressed trying to you know bash my head against the wall and grow them and then i finally read about buffet and i was like okay can hire other people to run my business and when you do that you go you kinda go into shock right you used to being this ideas guy and you start all these businesses and then you're running them and you wake up every morning and you're drinking out of a fire hose and when i got out of my businesses i suddenly stopped getting emails i wasn't needed i went through this existential crisis and i was like how do i still be creative and do stuff and start businesses while also just supporting the existing businesses we have and so it suddenly had all this white space to just start screwing around where i'd be like okay i'm gonna spend thirty grand and i'm going to you know try you know starting a new little business we've started a variety of these businesses and on to be honest the purpose of them is to distract me so that i don't make dumb mistakes i like taking action i like doing stuff but the best investing is done while you're just sitting there on your hands maybe not even making a move for a year or more hey guys i wanna take a second to answer one of the most common questions i get which is hey i got this great idea or hey my company is doing really well and i just need a developer i need somebody who knows how a code so that i can either bring this idea of to life or i can grow faster and you know i've been there before i've dabble in the no code tools trying to make it work sometimes that works most of the time it's not good enough tried to learn programming myself that was a waste of time and you know i've looked at to overseas platforms to say hey can i find an affordable developer you know i can't afford to somebody here in the states and california they're japan some silicon valley prices but maybe i can afford a developer in the philippines or in eastern europe and the big challenge has always been finding somebody who's actually like good like they're vetted like i never know if somebody's gonna just take my money and run if they're actually a good developer a bad developer and how do i know if i knew how a code i could judge their stuff but i don't have a code so what what i really like about this week's sponsor lemon dot io is that they have a vetted marketplace of remote developers from eastern europe so i know the founder pretty well his name's alex and what they do is they filter and they test and they basically have a reputation system of any developer that they have on their roster so you know if you go lemon io you're getting a developer who is actually good it's good quality is gonna get the job done and so what the way it works is you go you type what you need hey i wanna build this app or i need to add an extra fund and developer to my team and i i don't wanna hire within twenty four hours they'll match you with the right developer if it's not the right developer you just tell them and they'll switch it you know basically for free it's a replacement guarantee and they're actually cheaper than the other outsourcing platform so you know you get one big savings when you just go outside the us or outside of europe and you you get somebody in kind of in either eastern europe or in philippine and southeast asia you know you know you save money there but lemon dot i owe is actually half the price of the other platforms that try to do this and so it's stupidly effective i would just kinda take advantage of this as long as they they can offer these rates it's pretty amazing and alex basically told me that for any my first million listener they will offer a fifteen percent discount on the first six weeks of work that you have done so if you want that done if you want a developer who is vetted who can build your projects go to lemon dot io o slash m m again that's lemon dot i o slash m f m like my first million alright enjoy back to this week's episode and so these businesses distract me started a bunch of them and one of the ones that i'm really loving is actually local news so about a year year and a half ago you know i i've i every day i'm a news junkie i pick up all the big papers like new york times and washington post all that stuff like all this like physically or on my ipad or whatever and i've realized there's always incredible this incredible revolution happening in journalism in the states but in canada where i live we just had a shitty local paper and it was slowly dying to the point where it was owned by a big media company they fired all the journalists they just have like wire service articles and stuff and i was really bummed at i'd pick it up every morning and just be like sucks i don't know what's going on my own city and so i went to a a friend of mine who is a stay at home mom and i said hey let's make a newsletter and we're just gonna summarize everything that's happening in victoria every single day and you know kind of inspired by the hustle just super simple here's like you know kind of a cleverly written summary of what's up and before we knew it we just we just had like crazy numbers of subscribers i we're at the point so well i mean it's not hustle level but we're now at about forty thousand subscribers in a city of two hundred thousand right so we've got twenty five percent of the population opening next facebook dude you're the next facebook we're we're bigger we're now bigger than the local paper and i did it all for a couple hundred grand right call so it's called capital daily and i started so so the original goal was i just wanna i just wanna open you know the newspaper k my inbox and know what's going on every morning what events are happening what news stories etcetera and then now we started actually hiring journalists so we now have it virtual news team of journalists we're out there writing doing original reporting and pulling on threads doing investigative stuff and it's been super fun to i think everyone's dismissed media everyone looks at newspapers and goes this model doesn't work the reason newspapers don't work is because they have legacy their cruise ships it's hard to turn them and change them and they have these huge you know real estate portfolios they have printing presses all this stuff when you cut all that crap out you can actually afford to sell ads for way less you don't need that much revenue and you can really just have a virtual newsroom with a couple people in cover city so we're now debating going out and we just hired to ceo thinking about rolling this out all across canada maybe starting to do the states because we're looking at the numbers and going like yeah it's not the world's best business but it's important socially and it can actually be profitable and all it is is using the same tool sam that you guys used to do the hustle except of playing the same model to a small city i can nerd up for the thought day and i have a feeling we're going through sean do you wanna you show me you wanna go down his name just gave that go get a coffee you get fired out okay these letters let's let let's go down this vein a little bit so yeah let me give the listener a little bit of background here and andrea i don't know if you you i don't know how well versed you are but i'm a geek in this so local news is a digital local news is something that people have been trying to solve since the beginning of the internet the most important or one of the bigger attempts was tim armstrong you know tim armstrong andrew yeah aol yeah he was like the ceo or something some executive at aol and he started patch and i'm sure you've investigated that right i they okay so patch dot com they're they're he started it at as a thing in aol and they try to make it big in the early two thousands and it's not big but it's not not big it does probably fifty sixty million dollars a year in revenue but not much profit and it's kind of hard and he's invested out a lot of money into it so that's that and and and then a bunch more people have tried to do it particularly one guy named kevin ryan kevin ryan started business insider he started guilt he started mongodb d he started add what's the thing that became adwords edwards double click double click yeah so incredibly successful guy he recently what he did was something you did andrew where he invested three hundred thousand dollars i think into this thing called the denver right and they were gonna turn the denver right into capital what what's your thing called capital city capital daily capital daily so he tried to do this and he told me he goes i can't figure it out i i i i quit i can't figure it out so so many people have tried to do this and almost all of them have failed but there's a handful out there that are actually doing hundreds of millions of dollars in revenue there's business journals i don't know if you i don't know if they have those in canada do they have business journals you know don't talking about sean yeah oh yeah make hundreds of millions of dollars years in subscription and there's a few other ones that are doing a hundred hundreds of millions in revenue successfully it is such a sexy and fun project to work on it just sucks that so many people have failed at it well so it's so it's one of those things it's like starting a restaurant right it's like it used to be the world's best business now it's the world's worst business the question is if you apply modern technology and you run super lean can you do it effectively i mean dude like some of the some of the media companies up here that own all the papers some of them do hundreds of millions of dollars like one of them the toronto star which was like the i would say it's like the washington post of canada basically those guys just sold for fifty million bucks and they had fifty million bucks in the bank right they and now what ahead they well so basically they get to a point where the business doesn't make money or it loses money right so it's slowly eroding that cash and then they also have fifty million dollars of pension obligations because paper owners used to make so much fucking money that the staff would union eyes right that was a normal thing and you know labor versus ownership and all this stuff and it kinda made sense then because the ownership was making so much money and so they'd they'd union utilized and they'd get all these crazy pension benefits and that was totally fine because it was it was a duo monopoly usually you have one or two big papers in the city and you just make shit loads of money forever and then all of a sudden twenty years ago the business just died it's like imagine if you own coca cola and you're like i don't see what could possibly disrupt me and then some unforeseen you know the new science of pop where you can make pop that you know is better in everyone healthy and it just totally disrupts coke like it's just unthinkable so these companies are still huge they make look like this company that's sold for fifty million bucks i think it did two hundred and fifty million but as chris and i actually looked at it we're like maybe we could buy this as we picked it apart it's just a nightmare it's full of landline lines there's a one company doing this and what they've done is basically i don't know if they call it a franchise i don't know what they call it but basically it's called n two publishing so n two pub dot com i i'm looking i'm pulling up my notes on my research so they said that in two thousand and eighteen their revenue in twenty fourteen the revenue was sixty five million dollars in two thousand eighteen it was a hundred and thirty seven million dollars their model is kind of interesting it's kinda like a franchise model and that they bring on news reps who work on their own and are one hundred per percent responsible for gathering all the content and then n two takes care of the overhead and logistics and like filling the advertising and it's quite profitable i think they've raised money i think it's like if you look it it looks like it's like physical which i think is fine but i think at the end of the day like being able to do email with zero cost is way superior i mean it's like why would you guys send out the hustle as like a newsletter like a physical news that it'd be so stupid i know it sounds stupid i've talked to com old school competitors and they go we're digital only but then he goes we offer this new thing now where we charge you five hundred dollars a year and all we do is send you out like a basic ass like like almost like printer paper version and he goes people love it sam you should be doing this with trends trends should be a magazine that comes out quarterly that summarizes everything and it should be a print magazine with awesome photos and just take the best you know stories he's hand the ass to organize though have you seen with that guy i was his name of made that kind of yeah that guy that guy that is like i he's total tool he's his total tool but i like that he's there's someone is someone basically said he's a connor artist i don't know if it's true but wasn't there some someone called him out in vulture or something box well he he's not really where he's kinda like he's basically he's yeah he's basically he never really done anything and then he also apparently he has people on his podcasts and then he grows them for their numbers and then he goes out and he sells that data to people or something like that yeah yeah he had me on it and he was like you you know first it is pretty impressive the way he operates it like he's got this like drip system or he's just pinging you know he's got these va who are just pinging everybody anybody who's got a pulse to be like you wanna be on this podcast it's a number one podcast it was featured in forbes it's like an article he wrote as a forbes guest contributor and it's like hey and then it's just like hey when you wanna do this hey does this state work for you hey come on what's up hey your competitors just did it like whatever this is this drip sequence and so so i went on and he's like yeah we you know it's all about numbers listeners like actionable stuff i was like yeah that's reasonable i was like about you know i'm not gonna share any of the numbers yeah yeah that and then he he's like hey no problem he goes on there air he's like so what's your revenue first question basically my god hey we're yeah we're not really sharing that somebody uses do you have and how much do you make per user i was like well that's the same question just with a different angle he's literally got a data collection business that's like faked as a podcast heard exactly and nobody i don't know who's listening to but he's got this sort of army of like sort of equally like dump people who think that he's great and it's like oh no this is the blind fall the blind yeah and so yeah anyways but i like that he's doing a magazine i i give him credit the guy hustle more than most people and although i don't really respect him because i don't think he's on the up and up yeah think it comes up with some clever like mechanics this is quite so whenever i i remember when i was like twenty i would see like oh wow someone's like forbes thirty under thirty as if it's like you know the bullshit the head the editor in chief chosen and it's literally just whoever has the best p and pushes the hardest to get in and it it's amazing how it validates people who have achieved nothing it's crazy so sean by the way quick caveat whenever someone like starts off hot like that and says what's your revenue i my immediate replies is always like what do you look like naked or like how big you're debt or like what was it like when you lost your what was it like when you lost your virgin opportunity looking at the immediate reply that's like how much they'll be like what's your revenue i'll say like how much do you have in your checking account right now right i can't stand it oh so so local media is interesting to you andrew what do you think sean yeah i think it's cool i think the athletic surprised me in how how many subscribers they were able to pull doing just local sports news and making you pay for it and as a giant sports fan was like what are you talking about like i sports information news opinion is everywhere it's one of those like supply demand things where everybody loves sports so everyone's willing to talk about sports and everyone thinks they're an expert and everyone's got an opinion so like you're gonna charge people for that that doesn't make any sense and then what they got right was people have sort of an infinite thirst for things that are extremely relevant to them which is either stuff about yourself stuff about your friends and family or stuff about you where you live and that works for local sports teams there was just a bigger appetite than was being served by the nash publications well also is so it was so much of the reason why people subscribe to the newspaper they just flip straight to the sports section so if you un bundle that boom exactly and and so so there's that side of it there's like next door does this with neighborhoods citizen does this with crime alerts for like every police alert in your area like there's lots of examples of where this works i don't know if it's the most exciting it's definitely not an exciting business to me personally but also the question is what where does technology lever this so like okay emails better than a news bundle i get that but it's not email is not cheaper than the blog per right there's internet already made sort of like free the like printing process and so where are you getting new leverage is kind of the question i would have around it like to me to me there's like this social i like i i looked at it and i go yeah maybe each city could make two hundred grand a year five hundred grand a year profit whatever it's like not that exciting but what i get excited about is the idea of being the flashlight in the dark right i think there's all this stuff that is gray gray shit ness that happens in the city where if you just sat at the court like and you just like look at all the docket that go up you'd be like holy shit like there's all this crazy stuff happening in this innocent little city and being able to like point attention to injustice and crime and all the stuff that is just two in the middle i think that's the purpose of the local paper and so that's what i'm excited about it's like getting to play batman a little bit even though i'm like at the end of the day not directing it anymore but right it's cool to actually know i make a positive impact my city who you found to be the operator of this because this is the one giant black box of your operation like i love your life in a way but then i'm like oh god i'd have all these projects and they would all be execution dependent and i'm not doing the execution and i my in my life i found it very difficult to find people who can replace the ceo and be great ceos and hiring great ceos it seems like something that's absolutely essential for your model to work so like just walk me through the example of this like who did you find as the whatever having the execution barely matters right like it was such a simple model where it was like the at first it was just literally my stay at home mom friend would spend two to four hours a day doing it and i would just go and i i went to some friends who run a ppc agency and i said i'll pay two bucks per acquisition exactly what sam does with the hustle and we'll scale it up and we got that got us like ten thousand subscribers or fifteen thousand subscribers and then at that point i was like okay like i need i need actual journalists to make sure this is all kosher and start doing the original reporting and run a news team and there's actually a guy going into high school with who was at one of the big national papers and wanted to move back to victoria so i just poached him and put him in charge and then you know we got to a certain point now where we're bigger and we need more business leadership so we just hired a ceo who we haven't announced yet but you know it's iterative right and again the bar is so low it's not like i'm going to like prone racing and i need like the best ceo tax execute amazingly it's like it's not hard to send it at to mailchimp every day and right a bullet list yeah but that's not exactly what sean saying which sean saying it sounds like a nightmare to have thirty ceos because if you have thirty ceos and they each stay with you for two to four years like that means like every other couple weeks like you're you're someone's every recording anything is the difference between like all the great like the the difference been good and great from my experience at least is is quite large and comes from a person who's gonna just solve a bunch of problems have one or two creative ideas to get you un stock our get you to the next level and just fine i just feel like those people are really hard to find like even when i invest in companies i'm like oh that's a good idea i don't even believe this person is gonna be able to do and that's their baby that's their original idea that they've been pushing forward and i'm like i don't think you're gonna be great i mean i think it's a lot wrong bar yeah i think it's a lot harder though when you're talking with a start up right because a startup is like this mix all the right things have to come in at the right moment right what we're doing is we're generally buying businesses that have product market fit real revenue right me doing these stupid news projects and stuff it's like who gives a shit it could be the worst execution ever it barely matters the actual portfolio of real businesses we own we have to be really careful to select the right people but the advice i always give people is if you wanna build a business that is you know gonna scale and do well just find someone who's already done it before right right so if i'm buying an agency i'm gonna go find someone who's run an agency that's double the size and i'm gonna incentivize them appropriately make sure the cultures aligned in stuff but it's like saying going back to that chipotle example if you've scaled chipotle to ten locations profit it's not that hard to go and go okay who's a seasoned executive from the food industry who's done franchising before right that's a lot of what we're doing i know that's what chipotle by the way chipotle at ten restaurants took a investment from or i think it at ten took mcdonald's mcdonald's was like hey we have the we have the playbook of how you get two hundred locations up in the next year and we're gonna run that this is the legal guy and that's the construction guy and this is the other person and like you just kinda need to move out of the way for a bit and like we're just gonna do this and then they did that and then several other people they all started in colorado like noodles and company came next and then they just hired all the extra chipotle people they're like yeah this is the lawyer who did the pull deals all they're all their leases it's cool they're doing all my leases now and they just did the same thing and it's sort of a silicon valley for fast casual food in colorado and the same things happened the same thing happened in silicon valley where it's like yeah you hire the ex facebook the ex twitter people because you're the new snapchat and you wanna experience growth and build data teams and do all the things that you know you probably never done before but they did and andrew when you do this do you accept mediocrity like i was reading this book before the exit or something and their whole argument i i think that's what i was called and their whole argument was like you actually it's really hard to build a business that makes profit and good money like it's hard to build a business that's worthy of even being sold or bought maybe you should not even sell it and you should hire a mediocre ceo to run it and like like that was basically they're and they're like look at the math it kinda makes sense and you know i don't know i'm not saying i'd agree your disagree but is that what do you accept a mediocre ceo no i mean i'd like to think i don't but i think the key is buying businesses where they can withstand a mediocre ceo where they're already organically growing so well on their business model so simple that it's hard for somebody to fuck it up right so you know you look at the hustle and you go like okay if you just keep doing what you're doing you could put almost anyone in there as long as they didn't go let's blow a bunch of money let's go and try and build some crazy new soft where and run do crazy r and d and so to me it's like is your business good enough to withstand somebody who's not i'm optimal do i want an optimal ceo and the best possible ceo and every business absolutely there are situations where i have a ceo who's extremely weak in one area where i know that for example let's say they're a great operator and i see a great innovative strategy they could be doing or they could be doing m and a and rolling rolling up and growing faster i have to accept those limitations because at the end of the day the most important thing for the individual business is okay the product is freaking awesome and the team is happy right sometimes you do have to make those sacrifices yeah and we were talking about that you have this one company that i like inter and i was like man you guys can improve this so much if you did x y and z and you're like i know i've been telling them to do this and i was like well why don't you just do it and he's like they'll they'll figure it out and i was like that's such a zen way up of approaching it and i and i guess it's working for you but it's the hardest it's the hardest thing about what i do is like i see first of all it's you guys know this like it's so much easier to criticize someone else's business and be like why don't you just do x and y and z and it's always like well i don't have enough awesome people to do that or we don't have buy in on it or you know there's complexity that you don't understand because you don't have context we have that in so many of our businesses i have a million ideas for the ceo but i've realized that at the end of the day i hire in fire ceos and i give my opinion but i can't tell them what to do because if i tell them what to do and they execute what i do and they're pissed off because they didn't get to do what they wanna do they resent me or they think that they build a counter narrative that if only they've been able to do what they wanted to do would have been hitting their bonus or the business would be doing well so i've realized like i can just set up the guidelines and create the incentives which will be a magnet to get them to achieve the thing that i hopefully want right but yeah it's really really hard to tell someone what to do is both you guys know yeah in the in the first scene of game of thrones ned stark be heads the guy and he tells the son his son's is like well you know you don't have to do this what you know somebody else should do this and he's like no you know he who speaks the sentence must swing the sword and i've i that has been like one of the most useful management things that i've ever learned which is like the person who decides a person who has to do the action should be the one deciding and the person who decides should have to do the action and anytime you disconnect those two really bad things happen like if you're just telling the ceo what to do and then they have to go do it and they don't agree with that they wasn't their decision you're fucked and if well think about magic fifth to make a lay off and they go the board is making me do the lay off right right because that's the easy thing to do is blame the board well now the board's verified the whole company thinks they're working for evil evil people right you're so right to has to be the decision every tough decision has to be the ceos that's like a that's like a traditional gangster like in all the gangster movies they're like they act like like like the mob bought off your code or the gang leader is like up top and then someone speaks to their name and they're like oh you thought i went soft and you gotta like stepped out and like you know fucks someone went up once so i'll just approve you still got it that's like the traditional that's like how all the gang movies work hey everyone i'm are you here we're giving away a free masterclass class pass all you have to do is go to today's july thirty first edition of the hustle newsletter click the link and enter the code word hustle again the code word is hustle we'll email a winner on wednesday august fifth good luck what else andrew what else is i got i got a question so you listen to the podcast you know pretty regularly what's been something that we talked about an idea or a space that like you either know something about that we didn't know or you're excited about it or sort of like imagine we could have patch you in in that moment but like we can do it now so was this was there a topic or an idea or a theme that's that got your attention well i really interested you guys were talking a lot about this idea of how do you make a lot of money in a short period of time i think it was three million bucks in three months is that what it was yeah three million dollars guys we didn't we didn't do it i've listened no yeah so what every like i think ask i think it's the wrong i to be honest i think it's the wrong it's probably the wrong question to ask right with it it it'll it kinda creates this incentive of like you know i'm gonna put everything on red or whatever but i was thinking of about what i would do and i think i do the million dollar home homepage two point o like i'd find some poor kid who he'll he'll he loves tattoos and people can buy an inch of his skin you go and you sell this kid's skin you know added for tattoos or whatever i think you could easily make three million bucks if you pumped it up and put her on the hustle and stuff right but i was really racking my brain trying to think like how do you ethically make three million dollars in three months that's a that's a hard one so so the hard part so the the original prompt which i think is the reason why it's been really hard to do the original prompt was i think too hard which was three million dollars in revenue in three months and only inputting ten grand into it and i think the ten grand intuit it makes it very interesting if if you can pull it off it's even better but the ten grand takes away most of the traditional like distribution techniques and the original person i got the question from they didn't have that constraint in it like so what they were doing was they were finding apps that are in the app store that are producing millions of dollars of revenue produced by one person really simple apps and you know they might do like i'll give you an example of one of them it'll be like you know celebrity voice changer and it's just a app you talk into it and it makes it it it makes donald trump say that that same sentence or whatever has like ten presets but like you know two of them are free and eight of them are are you paying the five bucks for it and then they go do a bunch of cheap install ads and they you know they're making millions of dollars of revenue on a product you could oh yeah the they're other part of their constraint is something you could build in three weeks in three months would get three million in revenue that's the sort of catch you way to think about the challenge and so he's like dude i could build this app in three weeks i could you know in three months i could be at three million dollars in revenue but of course they'd be putting in a million dollars into paid marketing to get that but like you know that's okay if it's probably still do it yeah you're still doing it yeah you do it on credit cards and you keep scaling it up yeah yeah and there's another one that was like up you it's crazy go look at these apps plant identifier you just take a you just point your camera at a plant and it tells you what plant it is and this app has millions of installs and you know you who knew but people care about this stuff and so anyway anyways there's really simple really simple apps to build that generate a lot of revenue and you don't have to go this venture capital path you don't have to reinvent fucking rockets or like the new cloud software blah blah blah blah like you just tap to these really simple things and i would i would go the lead gen route have you andrew have you ever studied lead gen lead gen business okay so the summary is they don't sell for a lot of money but they can generate a whole lot of profit a simple example of this is apartment list dot com this company i used to work for many years ago they don't do this anymore but they started out as lead gen so they would just get you to say that you're they would somehow andrew would search fine an apartment in new york city they would have a list of apartments and you would say oh i'm interested in this one and then they would take andrew's information and sell it to zillow or sell it to the apartment building and then the apartment building would give a hundred dollars i would do that but for like irrigation services where you just go door to door and you figure out hey do you guys need your home painted or do you guys like want are you gonna read your garage we're gonna we'll help you read redo your garage and then or something like that and you go and sell those leads think you can actually make three million dollars that way very quickly in particular one genre or one category that i'm bullish on and i'm talking about this a lot is trucking so trucking so job people who are interested in jobs in the trucking industry and you sell their lead information for fifty dollars to a hundred dollars per lead to a trucking company who's hiring and i think you can scale three million in three months that way yeah it's interesting i think is one of those things though we're at the end of the day you have no competitive advantage so it's like a good three month business yeah but you're picking up pennies in front of the steam roller other affiliates catch on other lead gen catch on there's nothing you can do to protect your business i always think what's interesting is finding something like just to go back to the hustle you guys have this audience and you're clearly when someone buys an ad for a hundred grand or whatever obviously it's making them a hundred and twenty hundred and fifty two hundred grand have you guys ever thought about like doing that exact thing lead gen except for like just basically do affiliate like why don't you guys do affiliate so i can actually kinda talk about this i don't like talking about the hustle too much of this podcast because i hate revealing what's your revenue yeah what was it like when you first met your wife sal yeah that's great that was really good that's the awkward that i'm looking for so so with the something i'm thinking about doing is when you have people's email you actually have a ton of information about them so if sean at be dot com signs up i could tell where he works because i've always linkedin information his twitter information anything that he's used that email for something that we're thinking about doing is for people instead of saying like click here to go to salesforce dot com and tell him you're interested in buying it it it it should be just click here in a salesforce rep will contact you and if you just click here i can send salesforce to five thousand people who clicked it and all in the list of leads of like where they work at and things like that because no one's gonna buy like a hundred thousand dollars of salesforce like on a wanna click whatever most won't and so i'm thinking about like maybe i can like like click here and we'll have someone who's interested in in you we'll have someone from salesforce contact you and just sending that directly to salesforce we you call you've almost qualified them versus right now it's like they click through and they have to track them and they don't know if they're gonna convert or whatever and they don't have any information on them because we don't reveal anything i mean i can tell you everyone i could i can i know who's clicked all the ads but we don't tell that to them because of privacy purposes but that's something that is interesting to us the reason the reason i'm thinking about that is like in the local news business you've got all these local companies where they're not used to they're used to newspapers right so they're they're willing to spend five thousand dollars to be on the front page of the newspaper but when you say pay five thousand dollars beyond the front page of my email newsletter they're like what i don't i don't get this so we've started striking deals with people where we say like there's a a car automotive lead gen business that we're working with where to admin them no it i can't say because i'm gonna disclose some of the structure and stuff but basically we we put in their ads and then we basically get paid based on every lead we give them and a lead is worth like fifty bucks to them so they can pay us like twenty five bucks a lead or whatever so it's actually significant way more than we'd would make if we'd done an ad right and we know we're driving value to them and we can prove it so we can keep them you know amp it up and whatever so it it seems like an interesting route oh and i'm looking at your website you're using mailchimp if you pay a little bit of extra money mailchimp will give you social profile so you can what you can do is tell that car person this woman clicked this person clicked she's a woman who lives in this area of the city she works at this company so go ahead and reach out to her and you know maybe this is the proper language to use or maybe she's interested in minivan bands as opposed to ferraris or something you know you this is this stuff this is the stuff i get pumped up about is like you're not innovating you're just remix right you're just being creative you're going like okay there's yeah right now you have this revenue model but there's also ten others and there's probably ways to drive way more value or way more revenue just by being a little more creative with it one other just separately from that one other thing i've been thinking about which i haven't really executed but i think i would if i was starting today is there's all these cool products that are on product time right every day i'll be like oh well that's cool most of those fizz and most of them fizz sometimes they fail to catch or they don't go viral or whatever but a lot of the time it started by a developer and the developer doesn't understand how to market and grow something and so what i was thinking is it'd be smart to go through product hunt go back six months and just look at all the coolest shit that had that came out and then start approaching all those developers and saying look i'll give you five grand and to them they're like this is useless to me i've already shut it down i don't wanna pay for hosting to you that could be a five million dollar business what sean do have you seen on product time that would fit that like there's one i i actually just have seen some some cool stuff recently so let me pull it up but the first thing that comes to mind when you say that there was this app called gif and gif is a it's basically ai to make your camera look better while you're tele conferencing so it'll either remove the background it'll kinda like sharpen up your image it'll just auto kind of filter your thing so you a little bit brighter you look a little bit better and i i fundamentally believe people want that people want to look better especially now that this is the way that all business is done and so there's a little business like that and now like you know phil levin came out with mh and that's like you know a lot of people are excited about it it's kinda the same idea just oh this guy was the founder of evernote and there's a lot of hype behind it and you know he can build that company and probably raised at a fifty million dollar valuation today whereas these two guys you know there's anything guy who made gif probably is in the trough of sorrow like he did his product at launch there's probably exciting got you know two thousand people to click his thing and now there's probably like forty active users and he's like wait should i just be an engineer at google and go make you know four hundred grand right now like maybe that's better than ji and like he'd done the the plan identifier or the voice changer right right he wouldn't know oh shit i can go to app install and if i spend ten grand it turns into fifty grand within thirty days but if you know that you can go and do that i'll give you perfect example so so there's this developer who i work with who's brilliant this guy can build anything super young super smart all that stuff but he just doesn't know his his knowledge of like what the problem space is in the world is so low he like doesn't know of most of the problems at most wow so he doesn't know where to apply his talent and so i was telling about e commerce and i said you know one thing in e commerce is like your photos mean and everything and so you spend a lot of money on like getting your little photos shoot set up where you buy lights you buy the little white parchment paper and you try to get dslr camera you trying to take good photos but even after that you then upload them you then curate them you go to into photoshop and you try to touch them up because like you know that like if your storefront photos look good you'll sell more it's like very clear plus it's like from a vanity perspective you just want your site to look good so store owners care about this there's like you know million plus e commerce shops on earth and i told him i said there's just one app that's called light and airy and there's another one of those apps that i bet is printing money that most of people all don't know about and i know it's big because in the mommy community moms constantly talk about how they use light and airy it's a mobile preset so it's basically a set of like they tuned all the sliders so that all of your photos have the same look which is this very light airy kind of like the mommy classic mommy blogger i'm just like this is the mommy blogger blogger look and everybody wants this look and it just makes your photos are good and the the sale like the ad for it if you just go look at their facebook ad library is so good because it's just like before and after it's like kind of dull dark photo and then like light awesome photo and that's like i want that yes i want all my photos to have that transformation anyway so i telling i was like somebody should do this for e commerce where i just bulk upload a bunch of photos and it just light and airy touches all of them up and then i just like you know add those to my shopify or whatever and he's like oh sweet i could build that like easy and now you know there's a whole separate question of like is he gonna be motivated enough and he's he gonna like stick to it and like again he's got a sweet high paying job at a big tech company so like you know blah blah blah he's even when he builds it he's not gonna know really how to grow this thing but like i know how to grow this thing if any developer like if there's a developer listening to this just dm me maybe be like hey i'll do the light in everything thing and like i bet you i could build a two dollars to five million dollars someone someone built this but it was more manual like it was like you ship us your product will photograph it perfectly we'll do like the three d rendering and all that stuff yeah so there's some is a product call called sun that that there's a company called sooner that i think is doing at s o n a which is cool i kinda wanna check them out too but that's a little different because you gotta send them the foe the items and all that stuff and it's more manual whereas this is like dude we all take photos if you can make my photos look like twenty five percent better better i'll pay you twenty bucks a month like it's worth it for my store and so you just have to like and people have done this people have it's remix right people have done photo touch ups and filters for instagram for your personal life but like somebody you know we need to do that for e commerce done like that's the whole idea and you know how to market it and this thing will work and you know totally us anyways that's my job description because there's a developer out like that let me bring up one more topic we have all been using or it's something similar to it levels you guys know or is it called levels you know love the the there you got it you got it looks different is that i i don't have i don't have levels i have dex com dex comes way better there go okay so for those listening sitting about six months ago sean and i did this project where we wore these things on our arms and they told us our blood sugar level and anytime we were not in the thing that we agreed on we had to give someone a hundred dollars or something like that right it was pretty neat a lot of airs but still neat nonetheless so the company that made the technology to to make this all work was called levels right is that what's called levels yes yeah i invested in them in their angel around just recently do you did you guys get it in on that or no i did not invest i i didn't i didn't because they they don't control the hardware yeah didn't that's my number one they don't own the most valuable part well yeah i truth didn't even look at buy them yeah that's i buy them like one of the diabetes companies well i was like i'm pretty sure abbott will buy this in a couple years just because abbott has so much money and they're like we'll just employ this guy i love the market i actually don't think it's that abbott will buy them i i i don't think that's the case in the same way that like you know you know you know my fitness pal and whatnot they got bought by like totally different types of players and it wasn't like sort of the health industry that that bought them so i'm not sure that abbott is gonna do it because their business model is very different but if but i love the market these guys are in and if they can basically say hey it's not just people with diabetes that should be monitoring their glucose levels like i believe that for sure a hundred percent i believe that and hey a whole bunch of people who care about measuring themselves and care about fitness and care about health two percent of them are gonna pay monthly to have this i also believe that and so i i i really love their market the challenge i think is and and if they own that that would be just as valuable if they own the customer relationship directly that would be just as valuable i think the hard part is these monitors are very expensive and to in bulk be able to give these consumers without prescriptions for diabetes i i don't know how they're gonna do that i don't know i i think the coolest the coolest thing about it has been i used to you know i need like oatmeal in the morning and be like i'm being healthy steel cut outs or whatever and then when i got the glucose monitor i just realized there's was all these seemingly healthy foods like black eating tacos that were spiking me like crazy i really think like when i have friends that are like i wanna lose weight i'm just like put this on but there's such a resistance to it right it's this big bulky thing they think it's a needle it's scary so i think like we're five years ahead of where we need to get to i i hope levels is successful i know some of the people involved and they're really awesome but my worry is yeah the hardware they could be dis immediately so easily and but by the way the the founder i like what they're doing like the way they did that challenge i think that was really smart and then we came on here and we were like yeah it was a cool idea but we didn't love the execution and then the founder reach out was like hey guys we've made it way better let's try it again here here's another month on me let's like like i want you guys to see the improvements and you know i love that like i think he's doing the right things and they're they're approaching it in the right way well i put super it's super cool i put in ten grand we'll see what happens you're gonna be on your gulf stream calling us on the next podcast when these guys exit me and sean will be very upset i hope my ten grand turns into twenty grand i'm gonna get a sick use motorcycle and this is my angel investing dreams are made of the problem with angel investing right it's like you you go like yeah it could be a zero it could be this huge thing and you have no clue and you're just playing ro for like ten years yeah that's the ten years is the problem i'm i'm down with ro if i could spin the wheel in ten seconds later i find out the result and with this it's i spend the wheel on ten years later i find out if it was red or black have you had i have nice andrew yeah we have we've we sold the company to work day and we've had a few a few things in our portfolio give us a really nice return but if you look at it i i just keep thinking like i've put probably i probably have a ten million dollar venture portfolio or something and if i just taken that same money and put it in the s and p five hundred or apple stock or anything else i would be way richer and it would be way safer i'd have a more liquid net worth it would be cash in the bank right like so i don't think that angel investing is a good way to make money i think it's a good it's a good way if you got a good network in san francisco and you invest in your friends you'll probably do okay there are easier ways to make money i agree with that that's is why i i'm talking ten thousand dollar checks i love your i love your line by the way about how you know the stupid you there's a lot of stupid rich people in real estate right i think you wanna go where the stupid rich people are because that means that the business is so good that it can see succeed regardless of whether you're idiot and i think venture is like that was just lying them on because it trigger it triggered so many real estate people it was awesome i got so guys too well i mean like off as an insult i'm like i'm kind of i'm kind of complimenting you guys like i'm saying you're successful even though you're stupid so like like you're you're awesome you're winning well in a way in a way you have to be stupid to do real estate because you have a ceiling on your return right so if i go and buy an apartment building and i go okay i'm gonna renovate it and i'm gonna get a new tenants i'm gonna to increase rents or whatever that's awesome but there's a very distinct ceiling on it and you can't compound your capital to the same degree you could in a business where in a business you can innovate and you can drive you know outs size returns like that's why i wouldn't do real estate that said it's really hard to lose money in real estate and that's why you can still be dumb and succeed and hey again it's like it's not even dumb it's like you just don't have to innovate at all and an apartment building is worth something in almost any scenario it's super boring it's also super boring it's very slow boring super boring and it takes forever i've i've got a friend who he's a real estate developer and i remember i met him about ten years ago and the building he was working there's incredible building that is like a centerpiece in the city but it took ten years like i i i'm i'm i have so much respect from that he can actually spend the time and you know do a ten year project but i think i'd go insane like the the it just takes forever to do anything sean anything else you wanna go over i got two quick questions for you you had tweeted out two interesting things and i wanna know what happened from them so the first one if you have any updates you when hay launched and it was like all the rage you had tweeted out basically like okay instead of like a new email service provider i'm just gonna take the three best ideas best feature ideas of hey and just make it a gmail plugin in like who wants this and everybody was like oh fuck i want that did you ever build that or what was that well it actually wasn't even it had nothing do with hey i was already working on it before probably three four months before i'd even seen hay but basically it started because i tweeted out i've noticed that i will just sit in my inbox all day right like i'll i'll send a bunch of emails responses will come in new emails are always coming in and so if i'm not careful i can spend my entire day in my inbox and i feel like shit afterwards like i'm just sitting there wait watching the emails come in and when i thought about it i was like well fifty years ago the mailman would come and he'd delivered the mail once or twice a day you do your email or your mail for an hour and that was it that's a way better way to work and so i tweeted out is there a way to do that can i have gmail hold back on my email and only delivered it a few times a day and this developer in india messaged me and i was like hey i wanna build that with you and so we started working on this product called mailman and basically what it does is it allows you to kind of snooze your inbox so you can say you know what i get home at four i wanna hang with my kids i don't wanna have to use screen time and deal with all this shit i just want no new emails to come in until seven in the morning right i wanna get email twice a today i wanna get it at seven in the morning and one pm and then also it will hold back all the emails from people who haven't emailed you before so and then you can choose who's gonna get through and that's the to hey but we'd already been working on that before because the sandbox box still happening yeah it's it's live i mean we i'm beta testing it right now if you guys wanna try it i i i think of it as like an email firewall right it just keeps keeps all the crap away from you and kinda makes your life a little calmer andrew do what yeah there's no link yet but it's called mail i'll i'll we're launching a beta waitlist list so i'll make sure to send that to you guys when we go live okay when you do this do you are you creating who's is andrew funding this like does andrew put like ten thousand dollars into a new business account or does tiny fund it and you run creating different llc for or different entities for each one well my my business partner is much more the steady eddie he doesn't want to he like i'm i'm anti innovation he's like extreme anti innovation he doesn't wanna start the new business doesn't want the the trouble so i'm funding this through my hold c and then what i basically say to chris is whenever i have a dumb idea i will let you buy a portion of it when i start doing it and once i know what it is but if you don't do it then you know we're not gonna do it together right and so he there's been certain things we've done together and certain things we don't and what that does is it creates a lack of resentment if because i'm not off going and spending our money jointly on my silly ideas i'm spending my own money and then if he wants to or feels left out he can invest in it right so that's kinda how you literally wired twenty thousand well i mean what's your typical startup costs for an idea twenty grand twenty to fifty grand usually for you know get a business to a point where we can sell a product and see if people like it so then do you literally put fifty k into a a a an alternative account i i just go we have a we have a we have a corporation that we use to inc ideas so i'll hire whoever i need to or contract whoever i need to and then once it works and once says revenue we spin it out as the corp and then you just have an email list the people who wanna hire and you go hey everyone today i'm gonna work on this thing who wants to work on it pretty much i'll i'll just tweet like i mean in this instance i tweeted in some guy who's been amazing this guy mo heat in india has been absolutely phenomenal and he's just been a great partner and it like you know it's it just randomly happened because of twitter alright what should we be talking more about on future episodes what do you wanna hear what do we do more what do we number one feedback is more brainstorming fewer like kinda interviews or whatever i think like unless you guys have someone crazy on who i'm like i have to hear their story i just love hearing you guys brainstorm and it's cool having guests like brainstorm with you but the brainstorming is the value and then the other thing is from a business perspective i just think you guys need to be offering more to the community like you know there's gotta be an inside track right like i know you guys personally i have thoughts i'll text you but i'm sure the audience wants feedback on their ideas i'm sure the audience wants access to you you guys should be doing ama you doing business critiques and those should all be behind a pay love it okay we're over overtime so we should we should wrap it enter anything else no i don't i don't think so that was fun guys