alright what's going on this is sam we've got an awesome episode today we have andrew wilkinson on the pod andrew is one of our good buddies andrew owns this company called tiny tiny basically started as like this agency that made a bunch of profit and he took us profit and he's bought like eighteen or twenty different companies and he took tiny public i think today it's trading in the six hundred million dollar market cap so he's got like a really good perspective on what's going on in life during this episode i think it's the the like with twenty minutes left in the episode he's actually has set said something that i'm i'm sitting here taking notes it's gonna change my business it's about the this thing he called the profit first mentality and he goes in in debt on how much money he leaves in each business and how the ceos are able to operate them it's really insightful stuff that i haven't really heard him talk about before and then also andrew is interesting to me because andrew andrew's is my close friends but he's very wealthy and i get to ask him all types of questions kinda like behind this scene stuff on how he spends his money he talks about how he's now a patient appear at tia who's this famous doctor and how much he's spending on that and and and the outcome of that i find it very interesting he talks about shooting his shot with us here so he's done business with guys like bill act who's a you know worth ten or twenty billion dollars is a head fund guy and he talks about how he met charlie mu who's warren buffett partner and so there's really interesting insights on a how he lives his life but how he got indoors that he did when he was still up and coming really fascinating so this is the episode with andrew wilkinson let me know what you guys think you can hit me up on twitter the sam par and let me know if you can enjoyed it i feel like i could rule word i know i could be what i want to put at all in it like a days off on a roll alright what's up we got the man here andrew wilkinson fan favorite just of the pod welcome andrew how's how's how's it going hey guys i'm good so you gave us like a list of like ideas and things that you're kinda messing with but you have this thing on here about sexy versus non sexy things and you're like the things that everyone loves in the outside they're the hardest ways to make a living and so you you said here that i didn't know this i i or maybe i did i knew you owned a bakery is you said you own a deli and a bakery is that two separate things or is it one thing no that's combined that's one and it's a pain in the butt total pain the ass so yeah but think about this a lot lately because i think when you talk to young entrepreneurs there they always wanna do something sexy and i was like that too like i was a product ceo right you think every ceo kinda has their thing and for me it was making great products so when i was running software companies and stuff i'd always be thinking oh when we release this new feature that's when everything will take off for you know when we get this partnership or you know whatever big announcements think flashy but one of the things i've realized after running a company for like twenty years is it's really not the sexy stuff that pays off you know for example like we have a bunch of companies and you know one increased prices thirty percent after not increasing prices for five years they massively grew profits right that took ten minutes a little bit of planning and that paid off big you know one significantly reduced shipping costs by sizing down packaging you know another realized hey we've got insane seo on certain keywords and now we can drive affiliate revenue you know one had a bunch of customer gift card deposits and they were like oh shit we can invest these in tea bills and make five percent makes five hundred grand a year of just pure profit i just love these boring things like that and i've realized that it's kinda sad like you i grew up being like oh yeah i wanna be the next steve jobs or james dyson or something but the things i'm actually good at are these really really boring i call them like lever pulls you get in you pull a lever and revenue or earnings just grows you know by x percent you know the the good thing about that is that the older you get the more like appealing those get and so for example like and and this also is just in life like you know i've never seen a couch i don't like you know the older i get i'm just like yeah it'd be nice to sit right now and i feel like the same thing happens in business where i used to think i wanted to pull off some like awesome feat of like creativity and hard work and actually very rarely wanna do that there's times but most of the time i'm like oh what's the simplest thing i could do that will just make this work better and you were the king of that you you were the king of that you you owned a video streaming start up there or you're like to the moon or nowhere and you spent like five years or four years doing it i mean you you're all building crazy computer vision features and all this stuff even before ai became like you don't really big and and the reality was like we had this other business called birthday alarm the birthday alarm was like a reminder of it's your friend's birthday today and they would send them a cheesy ec card you know if you paid nine dollars a year and that business had been printing cash millions of dollars every year for like fifteen plus years i think it started in two thousand one and i'm this was like i was working on it like in twenty sixteen twenty eighteen so like you know eighteen years later and we we were like you know at one point we finally got our senses and we were like why don't we make birthday alarm like a little bit better like it pays all the bills we could just improve it right and even then the team was like list of ideas rewrite the whole thing in the new like you know make could rewrite javascript oh it's written in this old like language because that's what was hot in two thousand one we gotta rewrite the whole thing and then when we do that we'll be able to make it so much cooler we'll add these new features we'll redesign it we redesign our designer spends mock up after mock up on like making it cleaner and more minimalist and more cooler whatever and i tell you what after a year of doing all that shit there was really only two things that made a difference number one we raised prices so you know raised prices by thirty percent exactly what you said andrew because those prices hadn't gone up in fifteen years you just delete the zero and the twenty dollars a month and change that to a five because twenty five five exactly and then the second thing was we implemented stripe instead of the old payments platform them because stripe had a feature where if somebody's credit card expires and they get a new one like at all they you know their credit card company gives them a new one it would mess up your subscription and their the stripe has a feature for for twenty five cents they would just update it with the new card automatically without the user having to c type anything in and that one like one feature is like you know seven figure feature that took honestly no work on it we just check a box on on stripe to be yeah we want that we'll pay the quarter for every time you do that and you know we made like an extra million dollars a year of profit just off of that one thing basically and it it was a big lesson learned of like you know the the link between effort and result is so much more disconnected than you think and the more mature you the more you realize like you should just work backwards from what's actually gonna work not like what's the cool or or difficult thing to do these these things too they're so often they're one day of work right like we had a similar thing we had this invoicing software about ten years ago called ballpark and it was the first saas product that we built and we realized we were doing like i think a hundred million dollars of payment volume through the credit card processing so know i send sam invoice for ten grand and he has the option to pay on credit card and we just marked it up too and i think that was worth hundreds of thousands of dollars to us and i remember it was like ten minutes for me i was like going through stripe and realized there's this setting and i checked a box and suddenly we make way more money so i think this stuff is super powerful and i mean like just to tell to like give an example so you know as sam mentioned so i own like a deli in a bakery and when i was a kid there is this bakery down at the end of my street that i would always go to on the weekends i'd go and get a croissant and have a coffee and sit and listen to a podcast or something and i knew the owner my brother worked there the owner would pay me like ten bucks an hour to fix his computer and about eight years ago he comes to me and he's like hey i'm gonna sell the business i wanna make sure it goes in good hands will you buy it and i don't know anything about the bakery or anything but i kinda wanna protect this like cool neighborhood institution and so and you wanna be like a big shot you wanna be like oh i good come hang out of my place you know like would you like some of my bread yeah totally there's like there's always like a pride of ownership right like if i tell someone low let's say like locally i'm like hey i own this huge social network for graphic designers dr they're like you know eyes glaze over they don't care but if i say oh i own ot ta like the local bakery that everybody goes to with their kids they're like whoa that's so cool so there's a lot of pride ownership but there's like thirty or forty employees you know we have to have made sure like a baker wakes up at two in the morning to bake the croissants a million different things have to go right to serve a customer and have them have a good experience right and this business is like you know it goes from making money one month to losing money for six months you know huge swings if like one person quits it messes up everything super complicated kid to operate and if we're lucky at the end of all of that we'll maybe make a hundred and fifty grand a year now on the flip side we bought a business about almost ten years ago called we work remotely dot com and it's very simple it's a job board people pay money to post like a blue link kinda like craigslist so you're hiring remote you post on we work remotely it would be like you know i'm hiring a developer for you know automatic or whatever so we were when we bought that business they were charging one ninety nine and it was run by the guys from base camp and they just didn't do any marketing or promotion didn't do any seo so we buy the business we pay three or four times earnings or something which was you know a fair price given what it was doing we immediately take the price from one ninety nine to two ninety nine because that's what all the other job boards were charging and we hire an seo consultant we start doing seo we start doing email marketing that business went from doing about four hundred k of profit to i think couple years ago it did four million of eb or something in that range so these in that business that had two employees and one or two part time contractors right and literally like the entire team could go pens down for six months and it would still keep printing cash and so you look at it and it's like business on harm hard mode versus business on easy mode but the inexperienced entrepreneur would look at the bakery and go oh sexy right and it's like online there's bakeries too right e commerce businesses or bakeries in my opinion how much of what was so for those who don't know andrew he took his kind of his holding company took public i think today it's trading many hundreds of millions of dollars five or six hundred million dollars what were your earnings that you reported for last quarter or what's like the public record for your annual earnings i think it was between thirty and forty that's like the public number i think but what's crazy is that we work remotely would have accounted for something like ten or fifteen percent of of you know this company worth hundreds of millions of dollars of your guys earnings that's pretty wild well and i think a lot of people forget that small things can get big right we agree that we took that business from four hundred k we basically ten x it and we bought that business i think for about one point five million right so it's pretty it's pretty wild how powerful this stuff can be when you see a business where they're just not they're my on something they're not doing the best practices and often it's because they have other priorities i mean the base camp guys had a hundred million dollar arr saas business the last thing they're gonna be thinking about is this little pimple on their ass this you know remote chalkboard so buying buying from someone like that is a great opportunity i was talking to one of your company ceos last night and like mentioned this profit first book which i think is interesting sam do bernardino about this everyone is talking about that andrew told me about it months ago and since then i've seen like eight or nine friends bring it up i don't know what it's about though i'll give you my take that andrew you you fill in the gaps because i haven't read the book but i was like can you just it to me in five seconds and then they explained it to me in five seconds and i was like oh got it and that makes a ton of sense and so here's the the ultra had read the book version of of the book which is in the normal business you get revenue top line and then you start you know you get your gross profits and like a revenue minus what it took to sell it to sell those goods and then you have like all these other expenses and then what what's left is like the profit at the end so profits at the end normally and then you sort of take a distribution out of it that's probably how you ran the hustle yeah but you take no distributions because you're just paranoid and that's how i run my e commerce business and i think with the profit first mentality is you take the gross profit you put that in your bank account and then as you have bills to pay you you literally put it in your banking account or figuratively i think you literally move it you move it into a profit bank sweep that you don't you don't see sweep it out of the company it so you sweep it out of the company then the company gets a bill from some vendor or some software and then you have to go back and you have to now take money out of that pocket and pay it and there's something psychological about when you just accept the waterfall of expenses and you're like i guess i get what's left you sort of leave the fat in the company versus if i paid you out everything and then i said hey sam it's gonna be eight grand to use the software or whatever be like hey eight grand for this i don't wanna i have to take eight grand out of my pocket and pay for this you start to question a bunch of these expenses and it sort of forces you to get lean even though nothing changed except for the order of operations but does that ruin growth does that like does that ruin when you've see an opportunity and you wanna pounce on it like well no because you would just you would just you'd take that money and you'd invest it back in the company and at first andrew did did i bastard it or was that it was that an accurate description i i think you nailed i mean the way to think about it is like if you wanna lose weight you know there's that all these psychological experiments where they give people food on different sizes of plates and the bigger the plate the more they eat because psychologically you know they gotta get through all that food so the idea here is smaller plate so yeah you if you make a hundred bucks you immediately take away thirty and people are just forced eat off a smaller plate and so they eat less and they're more thoughtful about expenses but how do you do the math to figure out how much cash to leave in the bank well i think you would always say that let's say that your business historically has run with a thirty percent net profit margin you would always scrape out thirty percent and over time if there's excess cash they're more profitable you keep increasing that threshold right because you wanna be running as as as optimal as possible one of the weirdest things i've noticed in business is that everybody all ceos seem to go you know what twenty five percent profit that's good let's you know that that's what we should manage too yeah that's how i feel i do that what i've seen is that some of our businesses historically not at all times can operate with eighty percent or ninety percent in net profit margins and if we got a dream in there right if we got a ceo like me from twenty years ago or or sean from twenty years ago we'd be going oh let's innovate let's do all these new things and they'd burned through all that cash so i think it's a way of creating discipline now we haven't actually implemented this i've gone to all the ceos and asked them to read it and some of them have got excited and implemented it but i think it's a really interesting framework especially for smaller companies our buddy sue does this so i was like how much working was like are you come bank balancing getting bigger i was how much should i leave in there versus you know distribute out and he was like i just distributed it all out and i was like all of like what about like three months of working capital and he's like okay you can leave a month or two but he's like people act like you can't just put money back in the bank account you can always put money back in the bank account there's no penalty for this and he's like i think you have way better discipline when there's not this huge bank balance sitting there and you know and i was like oh okay i guess to you're right there is no like penalty or you know for just sending the money back into the bank account when it's needed but you will question is this really needed and why is this needed and what happened last month that is leading us to inject capital back yet i've i've like yelled at sam over text a few times about this many times super conservative i'm really conservative i've changed though so starting january one we're making the change where i'm taking out a lot of the money and we're actually just putting it into like tea bills into a different account to figure out what do we wanna do with the money maybe we'll pay ourselves a little bit i haven't paid myself anything from hampton at the moment but maybe we'll pay ourselves money as well but yeah i'm i'm you've convinced me that that's the right way and i'm i have to read this book what i'm still trying to figure out is how much capital keeping the business i don't know if i wanna like do so let's say your business is is spending five hundred thousand dollars a month in expenses due to just leave in like one month's expense what's the equation for chris chris and i we used to leave two weeks expenses in the business no way really if it meant that if they don't collect their ar their accounts receivable they go off a cliff now what they don't know is they're not gonna go off a cliff because tiny the bank will just inject more capital we're sitting on cash and so we move it in but it creates this sense of urgency to do collections and run the business very efficiently so that math is basically if you're doing twelve point five million in revenue you have ten million in profit you're only leaving something like five hundred grand in the bank yeah yeah so like basically payroll payroll plus expenses for two to four weeks max that's wild that's stressful but i i agree that's the right way to do it it's not well it's not though i'm because i mean most of the time especially in a recurring revenue business right like we'll do this with a specialist with saas businesses because it's very predictable we will say okay you know you always do three hundred k mr so you know we're gonna give you you know two weeks of cash because it's very predictable now once in a while maybe once a year they'll say hey can you inject a hundred k to help us make payroll or something like that or for r d but to go back to sean's point they have to validate the r and d whereas if the money is there they'll just take it and do the r and d are you gonna do this sean yeah i haven't gonna change it because i am like very guilty of this like when i i've heard this it was like oh i've heard a a truth i can't here and this is a boot bootstrap company specifically because you know otherwise yeah i don't i don't wanna be late the point but yeah like the it's so easy to just accept all your expenses as expenses that are necessary or required it's easy to oh what's the difference between this much net profit per month or this much i'm not taking it out anyways so i don't really feel the difference whereas if my paycheck is less i'm like where's the rest of it and then i have to get answer that question and so i think this is such a i look for forcing functions and i think this is an amazing forcing function that like initially i was ready to poo this book i was like what is this stupid idea and then as soon as i heard it flip flip my opinion there's there's a really good quote on that i was talking to a friend about this who runs a saas company i won't say who but he has sixty five percent net margins and he's been running this saas business for twenty plus years growing you know twenty thirty percent bootstrap every year just amazing amazing business and great entrepreneur and i was telling him about how we had not done this in certain businesses and how the ceos had mis allocated some of that cash and he looks at me and he just goes if you ask the dinner guests what's for dinner they will always say steak and i was like oh my god that's so true right it's like why wouldn't they you know it's not their money they you know yes don't get me wrong like a ceo's is incentivized for a bonus but for a ceo's bonus they can spend three hundred thousand dollars of your money and that might only be worth ten or twenty thousand dollar bonus for them they don't care as much you know every dollar counts when it's you and you're the owner operator i did the same thing when i sold my house i i was like okay i forgot we were selling it for like let's say it was a two point one and i was like i think we could get two point two and the agent was like i don't know maybe it's two point one and i was like well i i get it you wanna make the sale and move on i was like you know he and i thought oh we're both aligned if if it's two point two but he gets more and i get more and i realized well this guy gets three percent he gets an extra three grand i get an extra ninety seven grand if it's two point one i was like this guy doesn't give a shit about that three grand you know he's getting whatever you know three percent of the two million anyways this three grand is like not worth the time and hassle and risk of pushing a negotiation and so i incentivize him i was like how about this let's cut a new deal he's ready for me to like cut him down and i go no for every dollar you get me above two point one you're gonna keep fifteen percent of it and sure enough and and i made a i also had a penalty i said and if you don't sell it for at least two point one you gotta buy my wife this bag and i was like because i was i wanna take money on the pocket but i also want them to feel the pain so i made it a goofy gift i was like you are they these like expensive slippers that like clearly our waste of fucking money and he was like and then literally we got down to it got an offer it was around two point one two let's say and i was honestly ready to take it at that point but he was like hey he was like it's about two point one i don't know like you know let's see if we could push back he's like i really don't wanna buy that bag so he's like well i'm gonna for sure get it over this he's like let me see how far i can get it and he's like let me go push one more time and he push one more time we got a better deal and it was just such a simple like lesson around really understanding the incentives and not just like the like on paper incentives but like is this enough to move the needle for this person to behave differently or not i i think it's so crazy the more that i go through working with other people in business i realize that everything comes down to incentives and if you just think about the incentive you'll see the you know the exact behavior that they're gonna have i did the same thing when i was selling a house chris had an interesting point he was making stink bids on houses so if you look at like a million dollar house he would go and he bids six fifty or seven hundred and he'd do that ten or twenty times and the realtor was pushing back over and over and over again oh you know they'll never accept that there's no point because think about it the realtor gotta go they gotta spend thirty to forty minutes writing out the offer right send it and for them they're going there's five percent chance totally worth it for chris but not for the realtor and they're only gonna get one commission and so chris started saying hey look for every offer you send i'm gonna pay a thousand dollars immediately the guys totally down to do the think bids but before that he's going oh you're gonna get a bad reputation in the market you're gonna offend everyone don't do it it's so funny i don't know if this is public so sean will have to verify because he's closer to this person but we've got buddies that if you're like i've been with them in la when we were there doing like an event or when they're visiting new york you'll be like hey what are you doing today like i'm gonna go see these three apartments so these three houses that that i'm looking at and i was like you're looking to move he's was like no i just two these constantly and i put low ball offers on all of them and every once in a while someone will will take the bait and i get a a screaming deal is that right sean is that what they do that's right that's right and they just like are doing these doing this constantly they do the exact same thing has any of those stink biz ever worked yeah i mean dude it's just like some people like bargain shopping at ross trying to find that hidden gem that's in the basket that they know is worth more some people like to go to garage sales and then if you're just a little bit richer you do the same thing on the level of houses essentially you're like oh good if i can love all these houses you know touring house is also pretty fun and yeah they've they picked up a couple of assets that we have a mutual friend all of us and he buys companies and he was telling me what his funnel was he basically said i think they own eighteen companies he said that they looked at one thousand companies and i think they met with hundreds many many hundreds and then he said they they did lois for like two hundred of them and only fifteen or eighteen or something like that closed and i didn't realize andrew how much alright when i think of like a holding company or whatever you're doing but i think of it this way mostly because you give off this vibe which i think you mean to do it on purpose but i don't think it's the reality which is like oh i just sit back and everyone does the work and maybe they're doing a lot of the work running the companies but what i've learned about buying companies and i think sean's learning this too because i know he's meeting with a lot of people it is a sales job and you are hitting the phones and you are creating a funnel and that funnel still has like a three percent conversion rate so in order to buy three companies gotta talk to a hundred people i didn't realize how sales oriented this whole thing was that you guys are doing well for us i wouldn't say it is i would say in the early days it was for sure but we've realized that like cold outreach is not the way to go like we would much rather go and have a public presence and a reputation and have people actually seek us out and say hey i wanna sell you my company i've i've i'm wanna connect with you don't wanna be some random private equity firm that's like hey you know let me tell you about us and do the dog and pony show and stuff i you're still doing marketing so instead of doing instead of doing sales you're doing marketing the funnel still exists yeah i and i did not realize that have you noticed that sean while you're trying to buy stuff yeah i mean we just started this process let's say a year ago very much inspired by you andrew of like hey this is a a wonderful way to basically like own businesses without having to create them from scratch gives a good win to the person who's selling them we will buy minority which i don't i don't know if you guys always do but like we will also buy minority of them minority stake them but the thing that's yeah sam you're absolutely right obviously like you have to sort through so many just to find something worth buying and then even when you find something worth buying it doesn't mean the deal is gonna happen even when you think a deal is gonna happen and it doesn't a deal closes and so you end up with this like tiny tiny funnel and you have to be okay with hey we might do one deal this year or no deals this year it's so different than like entrepreneurship where it's all about actions it's all about features it's all about you know more customers more and more and more and more and more and actually less less less is almost you know the the name of the game when it comes to being very selective picking the right asset the hard part i think is a lot of people over invest in building that funnel and they have a lot of conversations and what i've done is when someone emails me and they they say hey i wanna sell you my business i'll say okay hey i wanna make sure i don't waste any of your time and so tell me these three things so it'll be like okay who runs the business right is that you do you wanna stay or go and and then what are your earnings and then after that once i have that info i say okay we would probably pay about x right and if they say you you know let's talk then i know i should spend the time and talk but i think a lot of people will actually have three or four conversations in like slow role and i'm like i'm like via email i wanna send the first offer i want them to say yes that's interesting and then i'll spend time on it and what i used to do is i would spend all this time getting no people and unboxing the business only to realize that their expectations were insane and we would waste a ton of time and just like with them bidding on real estate or anything else we throw out lois constantly like i have no qualms about that they're not binding documents you know we'll send someone an offer and there's something about if i if i read an email and i say pay all off for you two million dollars for your business i don't think people take it as seriously as when there's like a formal document laying it all hey on april t you will get two million dollars in this exact structure this is what we commit to people take it seriously so we we send them out all the time so i've never told the story i don't think publicly but sean about four or six years ago the hustle was two or three years old i was down on the dumps i was feeling really bad about myself i was feeling bad about the business and i told this person that i was not feeling great and they said you know have you thought about selling it i would really be interested in buying it and this guy i was like maybe he was look let's just hang out and meet come up to where i am and and fly up here and i was like okay maybe and he was yeah yeah i'm gonna send a jet i'm gonna i'm gonna send you a jet and i was like what do you mean a jet like i get like i gonna fly private like yeah i'm setting the jet so i take all these this is right when tiktok came out i'm one of the first tiktok was me on this jet it was like i was like i can't believe this i go to the private executive airport my first time ever doing that i get on the plane i'm in my own jet i have got the wall street journal sitting there and they offer me like champagne and all this stuff i'm like this is the craziest thing i can't believe this i was in heaven i meet with the guy and i'm woo i'm so floor by this and i'm like days away me being and like yeah i'm willing to do something then thankfully i snap out of the the the mood and i'm like it's okay i can keep going but that my friends is how i met andrew wilkinson in real life he was the one who sent me the jet he sent me a jet and it he totally why it died me i was such a redneck neck he goes i lived in san francisco he was i'm in vancouver i was like gotta go to new york though and i don't wanna have to like i guess i'll fly in new york and then you could send the jet and we'll just bolt right up and i was thinking vancouver was toronto i didn't i thought vancouver was next in new york and even know where it was it goes dude vancouver right by san francisco i wanted wanna be two or three hours but he flew me up there i don't know if you owned a bakery at the time you took me to a bakery and you guys totally tried to like wine and dine me that's how i met andrew i was like head over heels just because he sent this jet it worked you know that's actually the only time i've ever done that i think that's because you full shit it's no i'm a hundred percent i'm i'm i've picked up friends and we've done that kind of stuff before like if we're having an event we've flown people in but i've only ever done that for you that's the one time and i think it was because you said you're afraid of flying or there's it totally worked it totally weren't a flying commercial if only there was some other option i was thinking about a i was thinking a lot about newspapers and i was like oh sam you've built like the modern version of the newspaper you've got something really incredible i think you deal with hubspot that was better than what we would have paid well it was like we got to the numbers and we would have been cheaper than hubspot well and it was like i think a two years difference i i i remember we i went i even i was supposed to get married on a friday or a saturday and you wanted to meet me on a tuesday and i was like you think i could swing this guy's gonna slimy me private i gotta do this week can know i'm i'll be i'll miss maybe one of the events i have to do this and it was like so that was in two thousand and twenty and so we ended up selling a little bit later so it worked out for everyone but that's how i met you i will say one of the things i've learned from you andrew is you are a master network and normally networking is like this it's like this cabo you don't wanna get you know but but you're actually great at it and obviously networking is valuable people would love to have a great network and meet cool people and have excuses to do things together and i've seen you kinda throw your weight around in that area and this might be like asking michael jordan like you know how do you shoot a jump shot or how do you jump so high you like is like they can't really explain it's not conscious or that they don't really not explain it but i've seen you do this with like you wanna meet somebody who's really interesting and you'll find a good excuse to get connected with him or even how we met like you know you listened the podcast and then you were like hey i'd love to you know meet you let's do a call and you really kinda like took the time to do something that you didn't otherwise have to do and that's how we met we a great conversation then that led to kinda like us hanging out a little bit more and so i've seen to do this with like pretty influential people i've seen you bring people up to canada where you're at like you know the sort of home court advantage type of thing like do you have if i was to say like you know how do you do it and and by the way i at the when i was having dinner it with the ceo of one of your companies other the day they sent the same thing they go nobody's better than andrew when it comes to to building an awesome network who'd do you mean by the way zach he lives like oh yeah right on a minute away nice so so what's your what's your first date routine for meeting all these people and building in a network well it totally depends i mean i am so here's an example so in twenty sixteen i was reading a profile on dan gilbert sean or sam i think you know are both of you guys know who he is he's the quicken loans rocket mortgage guy and it was really cool it was all about how he'd taken his entire fortune and basically was trying to rebuild the city of detroit and i just i thought that was really cool i thought you know you see all these guys who gets super rich and then they put their money into like mutual funds right i think that's incredibly boring this guys trying to rebuild the city he's buying skyscrapers he's starting all these businesses so i just emailed him i called emailed him at like one in the morning and i said hey you know here's three bullets about me and i thought about what is he interested in and so i mentioned that i own that bakery i mentioned i'm passionate about my city i mentioned i bootstrap my business you know tried to find a few points of similarity and so i would love to meet you anytime anywhere you know if you're gonna be in a random city in you know somewhere in delaware i will fly to you just tell me when we could meet and i got an email response back like twenty minutes later saying sure and we ended meeting up in detroit and he was amazing and we spent an afternoon together give me a tour of the city got to know a whole bunch of people on his team and it was awesome so i will shoot shots like that when i see someone that i'm interested in but there's certain people that are like inaccessible like i wanted to meet bill ac i've you know been reading about him for years been falling you know watching every youtube video listening to every interview and first i was like okay he's an investor in chipotle maybe we could redesign i own all these agencies maybe we could redesign the chipotle website maybe we could do an app and so i email him and i say hey i'm a shareholder in your public company you know i i've got this amazing design agency i'd love to help in any way i can and he intros me to like one of the board members so i was like damn it you know like i just got handed off passed off but he he's he he replied the email though that's was good i mean applied to the email i just i basically just forwarded somebody but i was like okay i know his email like there something will happen here and i just have to wait for it and then i saw this charity lunch go up and basically every year he auctions off a lunch and the this year this was in like twenty seventeen he was having a terrible down year he got divorced he had like the herbal life stuff he invested in val and pharmaceutical everyone was kind of like shitting on him he being very quiet and so there weren't as many bids as usual to do this and so i ended bidding fifty seven thousand dollars to go have lunch with him and my bet was i had no i had no expectation to be any business to do because he's a hedge fund manager i'm a tech investor but but i knew he'd be like an interesting person to meet and so i went and we ended up connecting and then at the end of lunch he kinda pulled me aside and he's like hey i like you if you ever wanna do a deal together let me know and so years later we ended up buying a business and invested with us just like sub you a piece of papers says do you like me back yes or no like stick the box foot twice yeah well see that's what i'm talking about that's amazing you do the same thing with charlie mu and buffett right you you did the charity lunch you bought you bought the charity lunch is that right no no so that was a friend just a that was totally random that was a my friend andrew marks who he he knew charlie personally and he said hey i'm putting together a dinner and then through that you know i started sending charlie letters i knew that charlie is not someone you communicate verbally with he likes he likes to talk a lot and so and you can't communicate it with them him that way you gotta write him letters so chris i started writing him letters but but yeah i mean i don't know i like people i'm very extra what do you saying in these letters i i would just say like hey here before the dinner i said hey here's who we are this is the business this is what we do and he you know throw throughout the dinner knew who we were as a result and then we started asking for his opinions and talking about different ways we could help them with stuff i i think like the fundamental principle is be a value to other people and then also say yes to interesting people if someone can if someone appears to be interesting i will have lunch with them did he reply to the letters he would just call us we would we'd then we'd call them and he would verbally he's he like verbally he'll communicate you verbally but you have to write to him if you want to remember him to remember anything that's amazing alright sounds like like a like my penn pal charlie you know you like save all the letters in the back and the forth totally i i think it's great to see i you know like i say there's like two takeaways for one is like i feel like you check your ego really well like you are humble about wanting to meet these people and you're open about wanting to meet these people and you're not like you're not be you're not like above just shooting a shot and saying hey you know i think you're great here's what we do that might be relevant for you and helpful for you you know we'll love to connect i think the other thing is you're willing to spend money you're willing to hop on the flight you're willing to buy the charity thing you're willing to to to be a part of their their program that they're launching because you know they care about that right now and i think people are pretty everybody sort of understands it like having a valuable network is valuable but very few people are willing to invest because it's not a clear like dollars and dollars out thing and that's one thing i've picked up from you you gotta be really careful about it though because so about twelve thirteen years ago i remember i when i was first starting my company i would watch ted talks back when they were like really early and i would always go oh my god i wanna be in this room like who are these people it's like jeff bezos and bill gates and you know all these amazing people and so probably like thirteen fourteen years ago i started going to ted global and i started at the kind of baby event the junior one the only one i could get into and then i slowly worked my way into go into the main event because i met chris anderson who ran ted and i pitched him on doing a ted app and so i designed the ted app i used that to get into the main one and then i ended up meeting all these interesting people and so that was an example where i belonged but i was like the baby i was like the kid who's like you know people ruffle my hair oh isn't that cute this twenty three year old with a you know cracking voice runs a company but i kinda belong so i i think that's a great strategy sometimes but this year i went to the oscars and i went to the vanity fair after party and that was an example of something where i'm like i should not be here and you do not want that experience right that's not tell that story tell that story so yeah so it's was really random so i was at a conference about a year ago and i sat across from this guy and i asked him about to start up and usually when you're at these conferences they're like oh i own a b software company for doing hr or something and this guy said something that really caught my attention he goes i run a startup that helps people convert money into an interesting life and i was like whoa okay what is this and so he is this company called myriad m y r i a and the idea is basically they deep dive with you on you know what do you care about what are you excited about what you want your life to look like they kind of like paint out a blueprint like in two years you know do you wanna be what kind of people do you wanna be hanging up with what do you aspire to get involved with you know what are your passions what do you wanna do with your money and then they help you figure that out and so i did it i signed up and they interviewed me and i said i love movies and they said well do you wanna go to the oscars and i was like i've never contemplated that but i was like you know what that sounds like a fun experience i think spending money on funny experiences like that is worth it and so we go me and my girlfriend go down they set up like a personal stylist we buy like ridiculously expensive clothes and tuxedo and you know i get like a five hundred dollar haircut like just silly silly stuff and you know it's it's kinda cool we're in the actual oscar event and we keep seeing famous people and it's great people watching and stuff but after that we go to the vanity fair after party and i don't know if you guys know but vanity fair after party is this like super exclusive event where literally everybody is famous if there's five people there four of them are b or a list celebrities and the one that you don't recognize is probably like a super famous director or a producer or something so i'm danny at the bar and like to my right is john ham chatting it up with jeff bezos you know i see this guy checking out my girlfriend and i realized it's andrew garfield like very weird i can hear like seth ro laughing behind me rihanna struts in like it's just pinch me like the weirdest thing in the world and then there's me and my girlfriend and over and over again every person that walks by us looks us up and down looks a bit excited looks us up and down realizes we're not famous and then immediately turns on their heel and we're just like you know this is kinda weird we don't belong here and i start making conversation with people i'm you know i'm very social i start trying to chi chat with people and as soon as i said oh i'm not in the film industry i'm in tech people would just immediately glaze over and start looking over my shoulder like did not care could not carry less right and you know it was i kinda gave up at a certain point i just kinda was like alright let's just people watch or whatever but i realized that i'm really used to being in rooms where like obviously i'm not famous but i have like respect like you know if even if i'm at a dental conference i can probably chat with someone and be like oh you're the like you know you're the business guy at the dent at the dentist you know clinic or whatever we can talk business but i realized i had no shared language for these people and it's just not fun like you wanna be in a room where you actually have value and so imagine like i was a web designer and i'm like i wanna be an investor i wanna meet bill ac if i have no value to him or i'm not interesting him i should not meet him you have to wait until you're interesting and ironically since i went to the oscars we ended up buying letter box which is a social network it's like the largest social network for film buffs you buy if i go back to the same party i'm sure people would be like oh cool right but it's interesting you you had a great phrase you said you said i realized that you wanna earn the room that you're in and and i thought that was like because i didn't know it first like what would the what's the takeaway away of the stories is it just like you know i don't know sometimes you go to these parties you feel uncomfortable but you're you're actually right about that you do wanna you don't wanna buy your way into a room you wanna earn your way into a room and i do think that that's a that's a great takeaway completely listen to the the on the myriad so it's myriad dot us it says parker wayne kent stark why should they have all the fun myriad membership gives you and your team special powers to make your life more enjoyable in the world a better place and they say say open sesame me to the world's top private clubs and make sold out disappear from your vocabulary well done this is a very well done site is this is this company gonna be something legit and big i know they went through y comb is least couple of episodes you go too i think i think it's a really really cool idea and i think the idea like do you ever go to a city and you're like shit you know we didn't plan like i remember me my girlfriend went to tokyo and we kinda went last minute and we ended up eating bad food we didn't really like see the best of the city we just hadn't planned it so it's was just so wasted and it's one of those instances where i wish i had something like this it's like the key to the city where you're like hey i'm in tokyo i wanna go to all the coolest stuff you know all my tastes curate something for me or like chris wanted to go to f one and he doesn't know he wanna f one he doesn't know how it works he wanted to go last minute these guys got him like i think he met lewis hamilton he went in the pit you know stuff like that is like pretty cool but i yeah would be interesting to see because they raised venture we actually invested in their their angel round immediately because i was like this is such a funny idea but i don't know if it'll be venture scale we'll see they have a competitor that i looked at and i was poking on the website they say you have to spend eighty thousand dollars a month in order to make it be worth it so on average a million dollars a year to make these yeah twenty five i think it's twenty five grand and then they take a cut of everything you do so if you spend a hundred thousand dollars i think they would take a fifteen percent fee or something on that there's another service i just got invited to and my friend so he tells me about it and it's basically last minute super high reservations at any restaurant you wanna eat at in like new york london and miami and i'm like oh cool you should invite me and he's like no you don't get it if you don't use this invite i lose access and the guy who invited me loses access which i think is like genius so it's like forget what it's called but basically you and if i invite sean you have to use it within thirty days otherwise i lose my access and if sam invited me he loses it too there's some little trend i've noticed which is people as they get more successful or notable or whatever the number of times they hear know when their life goes way down and i've actually noticed that like there's some whole business in just the business of no for people that no longer hear know and what this means is twofold one is they still run into some things that they don't know how to they they can't like their their powers are are useless here it's like gotta sold what do you want me to do and so these guys with myriad have created a business around we eliminate the last few knows of your life and i've noticed other people like this kind of hey if you don't use this i get kicked out it's like i don't get kicked out of anything nowadays right like i'm paying the fees what why would they kick me out but there's a whole business around give people something to lose who never hear and know anymore they never get rejected anymore and it's like give them some rejection give them some way that they have some some risk yeah because it makes some sort of like feel like something matters when everything is an easy mode for them at that so i i i've been on the waitlist list to go to peter you guys know who peter is super famous doctor i i i've been on the waitlist list there for like three years his private practice do you mean private private practice which is like you know i think he only has fifty patients it's like getting weight it's like getting humor men or someone to be your doctor yeah it's super expensive and so i pay i pay like this absurd amount of money upfront and they do this thing where they psychologically test you before they allow you to become a patient and so i go through this test and peter calls me and he goes andrew there was something concerning in your your personality test i'm worried that you won't have good follow through will you do what i say will you execute on the plan and i'm like peter know like you got it all wrong like i i i pay attention to my diet like i track everything i wear a glucose monitor like you don't have to worry about me and he goes okay cool and so you know i've been working with them and last month i pull him aside and i'm like peter look be honest with me did i actually have like something in my psychological test and he goes you would you did i was like he's not even a real test and he's like yeah that is right so i actually did flag something but i was thinking what a great strategy because i'm like the dream patient now i'm like terrified of getting booted out because of this thing he said and i think doing something like that you're right pushing someone away creates this desire to be a good customer has it been worth it his his him being your doctor well i think i think it's so it's a lot of money obviously it's hundreds of thousands of dollars but if think about it this way if you're gaining five years of life for ten years of life what is that worth and there's been quite a few things i have i have an amazing doctor a primary doctor that i go to who i love and he's amazing but they have like a neurologist a cardiologist exercise ph who works with you so it's this team of people and they caught a bunch of issues with cholesterol and other stuff that i may not have caught otherwise so i i mean i think it's worth it but for a normal person is that a good use of money no i would say that's crazy use i to your primary doctor you're like doc i love you it's been great twenty years yeah we have to talk angelo angelina jolie out and we have a thing going to we're now in an open doctor relationship it's really yes one of those things i used to think you can only have one lawyer like i had one one lawyer and then i'd feel like i was cheating on my lawyer if i used other lawyers then i realized like no you have lawyers for different things or whatever but yeah i have now i've got a poly doctor relationship let's do you have this this idea of be the article on the whale what does that mean yeah so if you think about one of the biggest costs in most businesses it's marketing so you know if you think about it it's like fifteen to thirty percent of most businesses is just getting people to know you exist and getting sales so if you can own a business that doesn't have to market itself then you're golden you can run a super super profitable business so let's say that with marketing you run at fifteen percent cut marketing you could run at forty five fifty sixty percent so for example let's say that you're a fitness influencer so like you think about like derek from more plates more dates so he sells supplements and energy drinks and he's got this shampoo for hair loss he's got a great business because he is free marketing he just talks about the product on his podcast his youtube his instagram and he gets free sales right so it would be an as an commerce business if he was paying to acquire those customers it'd be a crappy business but he's got free marketing right now the problem is most of us don't have access to that most of us are not influencers but anyone can do that in a different way but being a barn on a whale so here's is the story of how we i kinda stumbled into this so i was at a conference about twelve years ago at the time met harley and toby from shopify shopify was this tiny little startup up they were bootstrap they were like fifteen people and they said hey we really like your design work would you design some themes for us but there's a catch this won't be client where we're not gonna pay you we want you to list them in our marketplace so the idea is like when people sign up for shopify they wanted people to be able to select a theme and pay like forty nine to two hundred and fifty dollars to do that and i started making five thousand dollars a month ten thousand dollars a month as these themes sold and i was like hey this is really cool like i'm not having to promote it i don't have to think about marketing or seo or anything you know people date they send all the traffic to their marketplace and so we started building one and more themes and we ended up spinning out that business but what what i didn't realize was that in the theme marketplace there was only so many squares and it took time to build the themes and it took time for them to get approved and so i started owning more and more squares so let's say that in the early days if you were to choose a theme there's a fifty percent chance that it was one of ours so we had like saturation early in this marketplace that was very small when we joined it but then as shopify grew i mean you guys know what happened they go public they start pouring hundreds of millions of dollars in the marketing i get free marketing i get to be the little barn on the whale and keep growing and it got to the point where that business was big enough that we ended up taking that public at a two hundred and sixty million dollar valuation a couple years ago so it's an incredible strategy now i think shopify is hard because you're late you know the the marketplace already exists it takes a lot of time to get approved you know that might not be the place to go where you might wanna look is like discord or at a par or any kind of software ecosystem that's not super saturated if you can go be a barn on a way you can make a ton of money i totally agree i have a business that's cooking up that's like this i'll i'll i'll tell you later i'll offline because i can't can't announce it yet but totally agree with this strategy i think it's amazing you invested so you said it went public at two hundred sixty million how much did you invest to get there it sounds like it was kind of some free labor to get the themes going but like how much capital did it take for you to get going because you were early twenty thousand dollars maybe so that's incredible and didn't you set you sold that business for fifteen million or did you sell for ten and bought it back for fifteen there's like a story where you sold it and then bought it back right so basically started it for twenty k sold it for about seven million two and then i ended up buying it back from the guys who bought it for twenty five million and then about a year later we took a public for two hundred and sixty million so talk about that like did you sell it like did you regret selling it or what why sell it in the first place was that a mistake and then psychologically how'd did you get yourself to buy it back for so three times as much yeah like sam i was like in this kind of like existential crisis i was super burnt out i've been running so i'd i had that business i had met lab i had two saas companies i had an e commerce business i was running all of them kind of running around like a chicken with my head cut off and finally i hit a wall and i was feeling really depressed talk to a friend he said hey why don't you sell one and were you were you liquid at that point like were you financially secure no no i i i was liquid in that we had a lot of cash flow but the problem was i'd be borrowing from peter to pay paul right so i have at any given time i'd have a highly profitable business and i have a start up and this startup would burn all the profits so i didn't have a nice house like you know i i i was okay but i always felt like i was gonna go broke and so getting that cash influx was amazing so i saw the business suddenly i'm sitting on millions of dollars and feeling very secure and the first thing i do is i go okay now that i've got all this money i gotta learn how to invest it and so i pick up a book about warren buffett and i start reading about this idea of competitive advantage and mo and what a good business looks like and as i'm reading i'm going oh my god i just sold the business that has all these qualities what the hell is i thinking and i was still on the board so the nice thing was i helped them choose the ceo this amazing guy named ben moore and i just kept watching and eventually the guys who we sold it to they were fatigued they wanted to they had they had they had kind of transitioned to doing something different so they wanted to sell the business and so i just stepped on their foot i said hey if you guys wanna sell we'll do a deal and so he did and then we did a bunch of m and a and you know packaged it up and took a public that's insane but the twenty k you invested was the initial amount but then you bought it back for twenty five and you guys bought a bunch of other shopify plug ins and apps right yeah i think our total amount if you look at it from that perspective our total amount of investment was about thirty six million so we we took you know start started it for twenty k sold it for seven bought it back for twenty five did ten million dollars or so of m and a and then took a public and we optimized the business and grew it quite a bit over that year god that's awesome that that's a that's a that's a good insight i mean i remember seeing like the press release for pixel union and i remember you talking about it but i didn't know that you actually had to buy it back for more than you sold it for yes five acts basically it's insane sean do you wanna go from here let's do the the life philosophy so you said people always suffer in silence what does this make yeah it's something chris and i've noticed so we have this real culture of autonomy at ton so we always say that when we hire a ceo we leave them alone and there's certain people who really love that so for example often founders who sell their company to us when a founder sells their company to us and keeps running it often they sold because they wanted to buy a c founder or they wanted to buy their vcs and they wanted to operate the business profit so they're kinda saying look i've got this great business i know what i'm doing i wanna a investor who's gonna leave me alone i just wanna buy out these guys on a bio c founder or something and so usually those guys they just wanna be left alone and we say great talk to us if you need anything and you know sail off into the sunset and run your business that works fine but often when we hire a ceo they're used to having somebody who oversees them so like a really active board or before they were in like some big corporation and there's constantly someone checking in and so they associate check ins with everything is okay and we don't do that we literally throw people in the pool and we say okay go and swim do whatever you need to do and and so often and because there's so many companies there's forty companies now in tiny there's always someone we forgot about that we're not checking in on we're not texting they've just fallen off our radar or we think they're okay and so we look at their numbers and they seem to be good we assume everything is fine so we just say you know they're not contacting us let's leave them alone well so often we found that people faster in silence they will actually assume that here i am i'm doing this great job for them and they won't even do me the honor of picking up the phone or checking in or you know whatever it is and and it's this i always i remember about ten years ago i was complaining i was i was hurt somebody i'd had sent someone an emotional email and they didn't respond and my friend says do you know what han razor is and basically the idea is it's never tribute to malice what can otherwise be explained by ignorance or stupidity right so never assume negative intent but everybody assumes negative intent you know we all know what it's like to send an email that's really important to us and the person doesn't respond for three or four days you assume that they're going you know fuck this person or i'm gonna ice them out in reality they're busy they've got kids they're doing their email they're they're behind whatever it is and so i've just observed this fact i don't know what to do about it but people will always assume silence equals malice and then you have this other one that says people don't change so you first said people always suffer or peep people suffer in silence and people don't change is you're you're getting a little pessimistic worldview but i agree with you i there's this author called the robert greene he's got you know forty eight laws of power and he has this other book book called human and he's like why should you study human nature because very rarely do people change it's the same stuff over and over and over again and then when you look at their individual habits whatever they've done in the past they're gonna just just assume it's gonna happen again and again and again in the future that's one of the best that's one of the best books i've ever read the laws of human nature by robert green i just got the audio and i just keep listening to it every year it's amazing i i've just seen this over and over and i find that you rarely hire someone and let's say like you know i love to hire people based on scrap ness will they figure things out will they learn do they have high pace i've never heard someone who doesn't have high pace and then coached them into having high pace right people either do or they don't and the the only thing i've seen where people changes is what it's kind of like addiction you kinda have to hit rock bottom right so if you're kind of an asshole and you talk you you interrupt people all the time and you always talk about yourself maybe you stop having any friends or you have an intervention your friends have an intervention with you maybe at that point you hit rock bottom and you go i need to change i have a problem but most people generally continue on their track that they're on and i i don't know i i see this all the time with with people i work with and especially people will not change their ideas so if you let's say a ceo comes to me and they say i've got i think the best way for us to grow as seo and i say oh well let's think about that what about x y z opportunity i think we should focus on ppc marketing or have you thought about changing the product in this way they will actually double down when i challenge their idea they will double down and they keep they will now defend the idea and as soon as they defend the idea they will commit and can they will be consistent what is it called commitment and consistency bias right now they will double down on that so i've just realized like trying to change people's impossible and at the end of the day we're all like people are like elephants and you're just the rider you know you just kinda go where the elephants is gonna go and hope for the best you see a big a poor guy the side of the street begging from begging for change you usa change comes from within my brother change them come comes from within i i completely agree with the people don't change i i had a thing in my life where at twenty two or twenty four i forget it was like this is rock bottom and i had like i there was like a distinct moment where i'm like i'm just gonna change that trajectory just a few degrees and if i just keep going it's gonna make a massive impact i i had it but there's really only like i remember i think two times my life where i'm like that's gonna change and it's happened but then like everything else it rarely changes it's very hard to break any type of habit or human nature characteristic i think i would disagree with that the only thing i disagree with is i would just say i mean send the phrase being people don't change i would say assume people don't change as a reminder to myself because the the the is you're like if you assume that people are gonna change because you're being hopeful and you're you're gonna make a bunch of bad decisions because you're gonna be baking and change when change is quite rare and so it's not that they don't change it's that you should not be assuming that they will change is the the trap that you wanna avoid it's like when you get married there's that classic saying like you know don't try and change the person that you're with and i think it's like it'd be pleasantly surprised like it has happened for sure but it's it's really a fool errand to try and go and change a person and also sort of like ads people are like oh ads ads don't work on me it's like okay everybody thinks ads don't work on them everybody thinks they're not average i think you know the same way it's like i think we think that other people don't change but if i i separately had asked you you know like hey if you are you the same guy you were you know the last twenty years like no i've learned so much i've evolved i've just matured i've i've changed so much and but we think other people don't change i think this i guess i'm a i'm a little more optimistic about the change although my sister has a funny phrase about this she goes peep people say that people don't change they do they get worse i'm like and i think that that's like you know more of the how to protect your downside mentality as you assume that people are not gonna change or it's just gonna they're gonna dig in even further into their current set of patterns but of course there's so many outliers that i think you can only make it an assumption not a rule it was awesome being able to catch up with you i'm happy things are going well and you you said a few things here like i i i hope the listener does this but i actually have a notepad here that i take down notes for like everything that we're writing this profit first thing and how much money leaving the bank i like i have a note here i'm like shit alright i actually have to go and actually do that mo said something a few times ago or and inserted of patrick campbell we had patrick campbell on from profit well on and i still have his notes here and i had a meeting with my company right afterwards was like here's a patrick campbell set just did a pod with them we gotta do this this is this and this is another one of that was up where you've actually given me things that i'm actually i gotta go and run and like tell my company right now this everybody loves this ceo who comes in with the whole with a whole new life life approach every every three days because they listen build podcast like if i at a company of be like hey dude you're not allowed to listen to podcast podcasts anymore or go to these dinners because every time you come back everything's changing that is an annoying person there's a good way to to deliver it though it's it's amazing how just a lack of awareness can change the results of the business right like as soon as i stop i remember i used to obsessively look at my credit card statement as soon as i stopped looking because i got too busy i started spending so much on stupid saas crap or whatever and i think just building those processes into your company can make such a big difference like the literally is those sam you described that thing of you know if you were plane taking off from new york you changed three degrees and that was the difference between ending up in seattle versus tijuana i think that same thing is true in a company yeah and i think that this thing might change the trajectory of of a bunch of things that i'm doing thanks for doing this and we appreciate it thanks for coming all it that was awesome guys alright that's a pod i feel like i could rule where i know i could be what i want to put my all in it like the days off on a road less travel never looking back