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extreme force of will, extreme bias for action, and a questioning of the the default speeds. It changes everything.
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0:17
Yeah, you you know I'm on this business entertainment kick where I'm looking for content that is about business but is made to be entertaining.
0:24
So, it's not just like a an informational video or or blog post.
0:29
And so, there's a new show called Fight Inc.
0:31
that I watched that I thought was really good. Did you see it?
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I saw the commercials for it. How do you get it?
0:37
It's on Roku, but I don't have Roku.
0:37
You just Google like watch Fight Inc.
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and it's Roku just like you just it's on their website, but you don't have to sign up. You don't do anything.
0:43
You just click and you just watch it. So, it's very cool.
0:47
I mean, they basically follow around Dana, you know, behind the scenes and then the UFC like kind of the machine behind the show.
0:52
And the UFC, just to put this in perspective, they basically there is no off season.
0:58
The UFC is 52 weeks a year.
1:01
Every Saturday has to be an epic show.
1:04
It's a live event with pay-per-view.
1:06
It's got fighters who get injured and pull out or get arrested and now they can't fight and there's all kinds of things that can and will go wrong, but it's like the actual epitome of the show must go on.
1:17
So, I wanted to share with you a couple of my thoughts watching this from a founder's point of view.
1:22
So, the first thing is as silly as this sounds, I do think that Dana White is on my Mount Rushmore of startup founders.
1:32
And I know he didn't technically found the UFC, but he basically did.
1:35
He created the the goddamn thing. He's a madman. He is a workhorse.
1:39
He's a machine and I really don't think the UFC happens if there's no Dana White.
1:43
And this got me thinking, there are some companies that I will call inevitable.
1:48
An inevitable company is one whose time has just come.
1:51
So, you know, YouTube today is a giant company, but YouTube's time had come.
1:55
Like if it wasn't YouTube, if Chad and Steve had not created YouTube, somebody else would have created the equivalent of YouTube.
2:03
Like the idea of putting hosting video online was going to happen. It was happening.
2:07
Somebody was going to win that space.
2:09
That's an inevitable idea.
2:10
The momentum of internet speeds going up and being fast enough where you can now upload and download videos was was was going to a point where video became it was an obvious thing.
2:21
We had Flickr with for photos.
2:23
We were going to have the a version of that for videos.
2:26
I would say that Google was an inevitable idea.
2:28
The more popular the internet got, people already needed search engines and portals.
2:33
Google happened to be the winner of all the search engine portals, but there was going to be a way to search the internet.
2:38
That was going to happen.
2:38
So, there's inevitable companies and then there's companies that I honestly don't think if it was not for the force of will of the founder, for the vision, the skill, and the determination of the founder that wouldn't would not have happened or would not have happened for like 50 more years.
2:53
It would have missed a whole generation of people had that person not made that thing happen.
2:58
My examples that I would put here are Elon's companies.
3:02
So, I think Tesla and SpaceX would not have happened and would not have happened at least for another 50 years had he not made those happen.
3:08
I think it required a level of insanity, self-funding, technical brilliance, determination to keep going even against the odds of failure, all of that for him to be able to pull those off.
3:25
I think the UFC is in that that non-inevitable bucket where UFC had just died.
3:30
It was about to go bankrupt before he before Dana bought it for $2 million.
3:34
I don't think that something like the UFC necessarily would have happened.
3:38
Yeah, I mean, I totally agree because it wasn't like a wanted thing.
3:40
We did it was one of those products where we didn't know we wanted.
3:42
And at first it was a freak show.
3:45
Like I don't know if you remember one of the more famous guys who first started fighting was this black guy who would use one boxing glove and one free hand.
3:52
And he fought against like a 300-lb It looks like a created character in a video game.
3:57
All of the people look like created characters.
4:00
Yeah, there's one Hawaiian guy who is like a sumo wrestler looking guy and he fought the dude with the one boxing arm. It's it's weird.
4:07
And it was a freak show at first, but then it took like 10 years and then athletes started doing it and it became amazing.
4:15
Like John McCain famously, I think in Congress or Senate or whatever, asked for every state to outlaw the UFC.
4:22
He called it human cockfighting and he was like, this is terrible. We need to end this.
4:25
And John McCain, the American hero, the the war hero the war hero was now saying this is this is disgusting basically.
4:31
And so, Dana had to find venues that would support him, which is why, by the way, Dana and Trump are so close now is because Trump would allow Dana to host fights at his Trump properties in um Atlantic City.
4:43
And so, that's why, you know, Dana had to fight and scrap state by state, city by city, event by event, almost going out of business many times.
4:52
They went $40 million in the hole before turning this thing around turning it into a $10 billion company.
4:56
Dana's got this great story.
4:58
It was like during the cockfighting like when people started saying that stuff and he was like, well, what do you think these athletes think?
5:05
And people were like, they're you know, maybe they're miserable.
5:06
They got to go through all this pain.
5:07
And he goes, let me tell you what they think.
5:10
They're killers and they want to go out and like do something that is active.
5:15
They need to get this energy out and they live their life like they're on head like they're in heaven.
5:19
And they look at your life, you just go to work at 9:00, you come home at 5:00, you sit in a cubicle as hell. These guys are free.
5:26
This is what they were born to do and what they feel like they need to do.
5:29
So, if you take this away from them, you're hurting them way more than when they get in the ring.
5:32
And I thought that was actually a pretty good spin on it.
5:35
So, one of the cool things about this show is it showed a couple things.
5:37
I'll tell I'll give you the big takeaway and then some of the small takeaways.
5:40
So, here's the big takeaway.
5:43
I said the word force of will.
5:43
And I used that word that phrase very specifically because I think it describes a certain trait of a founder. And I try to have this.
5:52
I think the best founders all have this.
5:54
And by the way, this comes with some tradeoffs.
5:56
When you have force of will, it is as brute force-y as it sounds.
6:01
It is uncomfortable to be around sometimes. You are pushing people.
6:04
Maybe you're holding a higher standard.
6:05
Maybe you're demanding that things are done a certain way or done at a certain speed.
6:09
That does not feel good to the other people that are in the organization that maybe used to working in other environments where they don't have that.
6:16
And so, there's a little story.
6:18
So, basically, it's like the one of the big fights of the year is coming up in 18 days.
6:25
And they've done everything.
6:25
They've prepped all the marketing.
6:27
They've got the billboard.
6:28
They show them painting the billboards at night.
6:29
They show them making all the marketing videos.
6:31
They show them doing all the different things that go into promoting a live show.
6:35
They're selling tickets, all of this. Which fight?
6:37
This was a I don't remember which one.
6:39
There was either the one where Jon Jones had to pull out or there was the one where Charles Oliveira pulled out. Okay.
6:45
And so, 18 days before, he gets a call. Fighter got hurt.
6:50
In his last round of his last sparring session, he was sparring without headgear. I think it's Oliveira. It is Oliveira. This is recent.
6:57
Yeah, he gets a cut on his on his eye and he can't fight.
6:59
So, now the main event that they've sold all the tickets for, that they've done all the promotion for, that's been building up for 6 months, the main event falls through.
7:09
And he's like and it's basically him and his guy Hunter Campbell.
7:13
And they're sitting in this room and this is this is business as usual.
7:18
Disasters are business as usual for him. And he talks about this.
7:20
He goes, give me all the stress. I eat that up.
7:24
He goes, I can take I can take it all.
7:24
I You could just see he's built up this resilience, this tolerance.
7:28
Like imagine, the UFC, which is a live events fighting business.
7:33
It's stadiums full of people.
7:36
When COVID happened, that kills the business.
7:38
There was no other business.
7:41
And Dana, not only was a sport that survived COVID where it got shut down and you couldn't do live events for over a year.
7:47
You can't just turn off a business for a year and hope it's all going to be okay.
7:50
Instead, he was the first sport back.
7:53
He created something called Fight Island.
7:55
He created a bubble where he's like, cool.
7:56
We'll test everybody when they get here and now everybody here is tested. Nobody comes in or out.
8:00
And he found an island in the Middle East that they could do this on and he branded it as Fight Island.
8:04
They were the first sport back. It was incredible. So, he was used to this.
8:09
So, he's talking and he's like, what if we did this fight?
8:11
What if we did this fight?
8:12
And the guys in the room are like, yeah, we could call them you know, I put out a call.
8:16
He's going to call me back. He whatever. And somebody walks by.
8:20
They go, his manager's in the lunch room right now. They're they're here. And Dana, within 0.
8:24
1 seconds, just hops out of his chair. Nobody else does.
8:26
Dana hops out of his chair, leaves the meeting.
8:30
You see him and the camera's following.
8:31
He goes to the cafeteria.
8:34
He's not even at the table yet.
8:34
And he starts saying he's like, Usman versus whoever.
8:37
Usman versus versus I forgot who he's going to fight at the time, but Usman versus Gaethje versus Gaethje.
8:44
Let's just pretend it was Gaethje.
8:46
And the manager's like eating a salad. He's like, what?
8:47
And he's like, Usman versus Gaethje. We got to do it. And he's like, no, man. I don't want to do this.
8:53
He's like, he's like, what? Are you kidding me?
8:54
This is a huge opportunity for him.
8:55
If he fights this guy or he calls out.
8:57
He's like, Usman versus Hamzat. You got to do it.
8:58
And the guy's like um he's like, no, no, he's not ready. Blah blah blah. Not ready?
9:06
Who do you want to fight? He says this other guy.
9:07
He goes, what does that do for you?
9:08
And he immediately he basically in like 4 seconds cuts the deal with him and and Khabib was there.
9:14
And Khabib is like, no, I think Dana's right.
9:15
I think this is what he should do.
9:16
It's going to be huge for his career.
9:18
And so, they cut the deal.
9:21
And and the agent, who's he's like a super agent.
9:23
He's like the, you know, like he's an agent for all these fighters.
9:26
You would think an agent's like Ari Emanuel.
9:27
He says in the thing, he goes, this is why I don't talk to Dana anymore.
9:30
He's too intimidating for me.
9:32
He's too like forceful for me about what what he wants to do.
9:37
And so, I saw that and I noticed and I said, most people will watch that scene and they'll they won't even pay attention to what just happened, which is that the greatest founders in the world, the greatest CEOs in the world, they cut through the All right, look.
9:49
The question that Sean and I get asked constantly is what skill set did we develop early on in our careers that kind of changed our business career?
9:54
And that's an easy answer. It's copywriting.
9:58
We've talked about copywriting and how it's changed our life constantly on this podcast, and we give a ton of tips, a ton of techniques, a ton of frameworks in throughout all the podcasts.
10:04
Well, we decided to aggregate all of that into one simple document, so you can read all of it.
10:10
You can see how we've learned copywriting, but you can see the resources that we turn to on a daily basis.
10:13
You can see the frameworks, the techniques we use.
10:15
It's in a simple document.
10:16
You can check it out in the link below.
10:18
All right, now back to the show.
10:21
There's a another video I saw recently of uh What's Who's that Walter Isaacson who did the bio of Elon Musk with Elon.
10:29
And he's on someone's podcast.
10:29
I think I think he's on Steve's podcast and he's telling the story.
10:31
And he says, "Elon is talking to the Twitter team, and he's like, 'Hey, cut costs.
10:35
We need to shut down the Sacramento um server farm.'"
10:40
And his engineers are like, "Okay, um going to be tricky cuz those servers are used for all of our infrastructure, but we could do it.
10:45
We'll make a plan, and we'll be able to do that in 6 months." "6 months?
10:50
What are you talking about?
10:52
We need to do this faster."
10:53
"It's going to take 6 months," Elon said.
10:55
"That infrastructure is critical.
10:56
It's so interwoven into everything that we do.
10:58
We're going to experience big big issues."
10:59
"Well, we'll we'll make a plan, and we'll we'll get it done, but I promise you we'll get it done in 6 months."
11:04
"I need this done in 6 weeks." "6 weeks?
11:06
We can't do this in 6 weeks.
11:08
We would have to do A, B, C."
11:10
"It could be done in 6 days. Let's do it in 6 days."
11:13
Now these guys are reeling, and they're like, "Elon, it can't 6 It can't be done.
11:17
6 weeks, 6 days It can't be done that way."
11:20
So he he he leaves the meeting.
11:23
And I think he was going to like Texas for uh for Christmas.
11:26
Yeah, it's Christmas Eve It's Christmas Eve.
11:28
He's flying to Texas to go see his family, and his his two cousins are hanging out on the plane with him.
11:34
And they're brainstorming.
11:34
They're like, "God, 6 months, 6 weeks. This is ridiculous."
11:38
And then um someone on the plane has the idea.
11:42
They're like, "Why don't we just go to Sacramento right now?
11:43
We'll just rip the servers out ourselves."
11:45
Cuz the one of the cousins one of the cousins I think worked at SolarCity or whatever, and he was like, "You know, we could we could use some servers.
11:51
We definitely need some servers."
11:52
And he's like, "All right, sounds good." And what does he do?
11:56
idea was like, "If we just take the servers offline, they're going to have to figure out how to fix it, and they'll fix it in faster than 6 weeks. I promise you that."
12:03
And I I think that was underlying it.
12:05
So Elon on the plane on Christmas Day, basically Christmas Eve you know, they're flying to to Texas.
12:11
Midway through the flight just uh tells the pilot turn around, "We're going to go land in Sacramento." Pilot's like, "Okay."
12:17
And then he says, "Hey, do you have a pocket knife?"
12:18
And the pilot's like, "Yeah, I do."
12:20
His bodyguard His bodyguard was like, "Here, I got one."
12:23
And like whips out this pocket knife.
12:25
And so they go to Sacramento. They take the knife.
12:27
They basically and the server the company that the farm basically they were like, "Hey, we're closed, dude. It's Christmas Eve."
12:32
And he's like, "Let me in. These are my servers.
12:36
Uh open this door right now.
12:36
I don't need you to do anything. Just open this door. I'm going in."
12:40
Opens the door, gets in, takes down the servers.
12:42
I don't I don't know the exact ending of the story, but same thing.
12:46
Extreme force of will, extreme bias for action, and a questioning of the the default speeds for everybody in the company.
12:54
And when you know that your default speed or your default clarity of thinking is going to be questioned, it changes everything.
13:00
And so I've been on the other side of this.
13:03
When I was at Twitch, Emmett was somebody who I've always said his oven burns a little hotter.
13:08
He's smarter than than the average bear.
13:10
And I felt that if you were in a room with Emmett and you presented a plan that to nine out of 10 people in the company, it would sound okay.
13:19
They wouldn't challenge your assumptions.
13:22
Emmett would always challenge the assumptions of why we're doing it, how much it's going to cost, why it has to take that long, etc.
13:29
And if your logic was not bulletproof, if you were not already maxed out in your thinking of what was possible, you were going to eat in that meeting.
13:37
You were going to get shredded in front of like 18 people, and not in a mean way, but your logic is going to get shredded.
13:43
You were going to get verbally undressed. And that changes things.
13:46
When you Once that Once you know that that's what's on the line, you come in a little differently.
13:51
You sit a little straighter.
13:52
You walk a little faster.
13:54
You you know, dot your dot your eyes and cross your tees when you go into those meetings.
13:57
And so he only had to do it once, and then for the next 18 months, I was ready every meeting with Emmett.
14:04
And so I think that this is just a very valuable trait that they don't teach you in the about it?
14:08
Was he Is Emmett a courteous person?
14:10
Emmett sort of has that like autistic forgiveness where you're like, he's not being mean about it.
14:15
He's not being nice about it.
14:16
He's being very direct, but you're like, he's oh well, that's just how he is. He's just being direct.
14:21
He's just like he's not trying to be in He's not trying to be mean.
14:27
And I wouldn't even say mean is the right word.
14:28
He's just trying to get to the truth, and he needs you to get out of the way so that the truth can appear.
14:35
He doesn't care about your feelings in the search for the truth.
14:36
And in fact, the more you kind of try to get in the way of the truth, the more he's like, "What are you doing? Get out of the way.
14:42
We're trying to find the truth here."
14:44
That's the way I would describe how it felt from my point of view.
14:45
And and really like I was rarely on the receiving end of it, but I saw it happen many a time, and I took note very quickly of like, "Okay, you got to come correct here."
14:54
Well, cuz I don't like people who are like and I used to behave and I regret how I used to behave, but of like being needlessly rude.
15:01
And I think that the people who are needlessly rude I think Dana would fall in that category because he loves to fight. He loves to battle.
15:08
So he just told the story last week.
15:10
He goes, "Let me tell you something.
15:11
I'm going to war right now with Caesar's Palace." And they're like, "Why?"
15:15
He goes, "For the last 6 months, I've been playing like back baccarat or some like casino game with them.
15:21
He goes, 'I'm up $17 million on them right now.'"
15:24
He goes, "I wake up in the morning and I think, 'How am I going to win this war today?'"
15:31
He goes, "I'm going to lose eventually cuz they're going to win.
15:33
But right now, I'm crushing them.
15:35
And each morning I wake up, I go to work, and instead of going home" or he he said he goes like, "Uh when my when my kids are asleep, I go back to the casino, and I'm ready to go to war, and I thrive off that."
15:47
He goes, "I want my back against the wall, and I want to go to war."
15:50
So I got to say this cuz I'm a Anybody who's an actual gambling degenerate, you listen to Dana's gambling story, and this is only going to apply to 1% of the audience.
15:59
So I apologize to the 99% who are like, "Who cares about this?" I care a lot about this.
16:04
So his story has some holes on his gambling stuff.
16:07
Here's I would like to list some of the holes that I'd like for him to explain to us.
16:11
I'd love Dana to come on and talk about it. some of the holes.
16:13
Like he tells us one time that he got too drunk and he lost He goes, "I I think I lost $60,000, and I wake up in the morning and they're like, 'Hey, man, you you owe us.'"
16:20
He goes, "Yeah, I'll get you the 60."
16:21
He goes, "No, no, no, no, no. It's 6 million." Yeah.
16:27
I'm not saying he he doesn't admit that he loses.
16:28
I just In that interview, he said, "I'm up 17 million on Caesar's this year year to date."
16:35
He says, "My rule is that if I make a million bucks, I walk.
16:37
And if I lose, I'm willing to lose up to 6 million." Okay. Oh my god.
16:42
Then he says, um "I've only lost twice this year." So it doesn't add up.
16:47
How do you If you win If you walk away when you win a million or you lose 6 million, and you're up 17 million, and you've only lost 2 days of the year, and it's we're halfway through the year.
16:57
The math ain't mathing on that one. Fourth thing.
17:01
He represents himself as a like skilled gambler who beats the house.
17:05
He's playing baccarat, which is like a 50/50 push game, and blackjack where you're down 49/51.
17:10
There is no skilled like The biggest loser in the world is a professional blackjack player.
17:18
I'm just going to say that again.
17:18
The biggest loser in the world is a professional blackjack player because you're professional at something that is stacked against you is a by definition losing game.
17:27
Secondly, you're probably really smart and could have done so many things with your life, and you chose to play a game that is stacked against you as your professional career.
17:33
And third, you're delusional cuz there's no such thing as a professional blackjack player.
17:39
That is why that is the biggest loser job in the world.
17:41
Well, he's but the fact that he like continues to do it I'm not saying Dana is that by the way.
17:45
Dana's job is running the UFC.
17:45
But just as a side tangent to any professional blackjack player out there, that makes no sense.
17:51
He could be a degenerate and also and also a great business.
17:54
He could be a degenerate gambler and also a great business.
17:57
I know what Jordan was and many others are.
17:59
So what else did you learn in that documentary or that show?
18:01
of will, bias to action, speed, cutting through the BS I think is is tremendous.
18:06
And his other employees even said this.
18:08
Like the head of PR was like, she goes, "Yeah, work starts at Work starts at 8:30. It's 6:30 right now.
18:12
I'm doing my workout, but Dana just texted me saying, 'Are you at the office yet?'"
18:18
I told him, "Not yet, but I'll be there soon."
18:19
And she was like, "You know, Dana's going to do this press conference."
18:24
Dana is the type where he Once he decides he's going to do something, he's like a a rhino going to do it.
18:26
He's He's going to bulldoze through, and you're either with him on it and you're helping him do that, or you should just get out of the way.
18:34
And you know, I I just thought, man, another really hard job being the head of PR for the UFC is a very very difficult job.
18:41
And that woman is with him everywhere.
18:43
Uh I forget her name, but uh Rhonda or Linda or something.
18:45
She's always with him, and what you'll you'll notice is they do the press conferences after the fight in New York time. It's like at 2:00 a. m.
18:53
And then you'll see him on Monday in France for another press conference.
18:57
They work their asses off. Yeah, if if 100%.
19:01
Let me tell you All right.
19:03
So we talked about a company on here a bunch of times, but I actually just met the the founder.
19:07
So I'm going to do a little bit of a repeat, but remember how we talked about 29029, the Everesting thing?
19:14
It's the outdoor race where you kind of run run up and down a hill as many times as it takes to run the equivalent of Mount Everest.
19:20
An awesome thing started by friend of the pod Jesse Itzler and and others. Yeah.
19:24
So it's I guess Everest is 29,000 ft.
19:26
So hence 29029 is the name of their brand.
19:29
We've talked about them a bunch, but the guy coincidentally joined Hampton recently.
19:35
So I was able to like I called him this morning, and I was just talking to him because I've been so fascinated.
19:38
We talked about Hyrox, and we talked about a a bunch of these underground um uh not underground, but these like niche sporting events.
19:46
And I actually think they're better businesses than I previously thought.
19:48
So let me tell you about this one.
19:50
So so if you go to 29029, I think it's called 29029everesting. com.
19:56
You can go to the website, but check this out.
19:58
So, they do seven events a year.
19:59
Each event only has 300 people.
20:04
This year, they sold out the entire year in 4 minutes for all of the events.
20:06
And he's purposely keeping this small.
20:09
So, if you do that math, that's $13 million in ticket sales that he's done.
20:14
And he told me that basically they want to own all the accommodation.
20:19
And so, basically it's turnkey.
20:21
You pay $6,500, you show up.
20:21
In some locations, you can stay at like a Fairmont Hotel, which is where they they partner with.
20:27
Or they do like glamping.
20:29
And you go to like Whistler and all these like really beautiful places.
20:31
And so, you show up, you do this event.
20:32
And they The reason they keep it at 300 people is so you can meet everyone.
20:35
And so, you can have this experience where where you get to know all of your people.
20:40
And so, you keep coming back year after year. But, listen to this. They started in 2017.
20:44
When they started in 2017, Jesse Itzler was Mark's partner on this.
20:49
Which is like the whole idea of like an influencer partnering with you.
20:53
Jesse only had 5,000 5,000 followers on Instagram when they started.
20:57
He wasn't that big of a deal.
20:58
And yet, in their first year of business, they made $500,000 in revenue.
21:01
In 2018, their second year of business, they did a million dollars in revenue.
21:05
By 2020, he said they were doing really great, but COVID happened.
21:09
The business got wiped out.
21:10
And so, in '21, '22, they had to start all over again.
21:12
But, he says it's a great business.
21:15
He's like, "It's negative working capital.
21:16
People pay up front and I can use that money to go and pay for all the accommodations and pay for everything."
21:21
And he says it's a great business.
21:23
I was like, "Well, what's wrong about this business?"
21:25
Well, he said, "The first thing that sucks is it's a fad.
21:28
Meaning Tough Mudder, um a bunch of other events.
21:34
Like, you look at some of these events like Spartan Race, they get really popular really fast.
21:38
And the Tough Mudder was doing 100 million in revenue.
21:39
Now, it filed for bankruptcy a couple years ago.
21:41
Like, you have to figure out how to keep people coming back over and over and over again. And I asked him.
21:46
I said, "How do you How do you do that?
21:49
Like, what are the like the What are like the keys to make this work?"
21:54
Because this is kind of an interesting thing.
21:55
I I don't know if I would ever want to start one of these, but maybe one day.
21:58
He said, "The first thing, you need a story.
21:59
So, you have to tell your friends what's something exciting that you're going to be doing.
22:03
And it can't be really like running a marathon cuz everyone kind of does that, but it has to be a little bit more exciting. You need a story.
22:08
You need to be going somewhere beautiful.
22:09
You need to be doing some ridiculous race.
22:10
The second thing, it's got to be challenging.
22:12
Do you know how many people who start a marathon finish?" Uh 70%. 99%.
22:19
99% of people who start a marathon end up finishing that particular race. Not so hard, then. It's not so hard.
22:26
In his opinion, you need roughly a 70 or 75% chance.
22:30
He said, "For his events, roughly 70% of people go through with it, 30% fail.
22:36
The third thing, you have to learn some type of skill like a new skill or acquire some type of new fitness in order to accomplish it.
22:42
And the last thing, it needs to be in a beautiful place or it looks cool in photos."
22:49
So, I was thinking about this.
22:49
Let me give you three ideas for ridiculous fitness events that could work out. You ready? All right. Hit me. All right.
22:55
The first one, we're going to call it the Burly Beer Mile.
22:58
You dress up like Paul Bunyan.
23:01
You go in the mountains on a track near a track.
23:04
You run one lap, chug a beer, run a another lap, chug a beer.
23:09
You do that four times, four beers, one mile.
23:11
What do you think about the beerly the Burly Beer Mile?
23:17
Look, if you can give people any excuse to drink, you already have 80% of a good business, okay?
23:21
There's a reason that like Topgolf is really popular.
23:24
There's a reason that people go to baseball games still.
23:27
It's not because they're wondering what's going to happen in the top of the sixth.
23:30
It's cuz they want to eat hot dogs and drink beer outside.
23:34
Like, giving people an excuse to drink is a great business model.
23:38
If you just layer on top of that a contrast, a juxtaposition, oh, it's fitness and beer. Love it. I'm already in.
23:44
I don't know about the Paul Bunyan.
23:45
I think that's not sure that's on trend with the aesthetics that we're going for here.
23:50
But, I think if we workshop this idea a little bit, you you could have something. All right.
23:54
How about the Paddle Prison Break?
23:56
A paddle boat race from Alcatraz to the coast of San Francisco. The Prison Break? Oh, I like this one.
24:06
My mind was still on the beer one for a second, by the way.
24:07
I feel like just the the beer mile or the beer the beer marathon, it's a half marathon and you drink 13 beers, I think has has legs.
24:14
Or maybe it's like maybe maybe it's a it's a quarter marathon.
24:20
It's six beers and six miles or something like that.
24:24
Dude, I did a By the way, I did a beer mile in college.
24:25
So, you chug a beer to start, run a lap, whatever.
24:27
You do it for four beers, four laps, one mile. I threw up.
24:31
And if you throw up, you have to run a fifth lap.
24:33
It took me 15 minutes to do it. It was horrible.
24:35
Yeah, but we call that the victory lap.
24:37
It's like, "Oh, I had to do a victory lap." Why?
24:40
Because I threw up during it. Oh, man. You sound fun. All right.
24:43
So, let's do Prison Break.
24:46
So, Prison Break is we drop you off the side of Alcatraz in a in a small boat. A paddle boat.
24:50
We're going to call it the boat.
24:53
We're going to call it the Paddle Prison Break.
24:56
Is there like a lane set up or are we just going to lose people into the ocean here? What's going on?
24:59
We got some liability concerns.
25:00
We're not going to let details get in the way of a good idea here.
25:03
I think I think there is definitely something to the prison break out of Alcatraz if you can do that.
25:08
There's a a swim race that happens every year, but I'll give you my last horrible fitness idea. You ready?
25:12
We're going to call it For the prison break, you have to start in cuffs. Great for the photo. Adds a story. Adds a challenge.
25:19
You're going to have to learn and have to help each other get out of the cuffs.
25:22
So, everybody's in cuffs.
25:24
You need somebody in this race who like can just get out of cuffs.
25:27
And then they'll get the little pick and they'll start picking other people out.
25:29
And then that's how you get out of this thing.
25:32
And you have to have a criminal record.
25:35
In order to get invited, you must have to have at least a class B misdemeanor.
25:40
a little gold patch on your on the shoulder if you actually have a felony or misdemeanor. Yeah.
25:46
We'll just call you out there.
25:48
And the last horrible idea, we're going to call it the Skyline Scramble.
25:49
A race through NYC, but you can't touch the ground.
25:53
You got to go from building to building.
25:57
A like a parkour challenge? Yeah, baby.
25:59
The only person who survives wins.
26:04
No, these are all horrible ideas, but I did think it was incredibly interesting to hear this guy's business.
26:07
I didn't actually think that this company could be as good as it is, but I'll be eager to see if this thing works.
26:12
I uh I dude, I think these types of experiential businesses I remember when I ran a a conference.
26:18
It wasn't the same thing, but like having a thing that you work towards and then all the people come to, it was like it was a very fulfilling thing to do versus just being on the internet all the time.
26:27
It felt nice to meet your customers and things like that. It was pretty awesome.
26:32
So, you didn't give me the heads-up about this, but I'm down to workshop a few ideas live for you here if you'd like. All right. What What do you got?
26:41
when you were thinking of these, what what what how did you put yourself in the mindset to even come up with these ideas?
26:45
What were you What got you going?
26:47
Well, they're not very good ideas.
26:47
So, uh So, whatever mindset I was in, I would say avoid that. All right.
26:55
We're going to go with um maybe nostalgia.
26:57
So, the Boston Rover It's It's Red Rover. Remember that game? Red Rover?
27:04
It's but with just all the people in the city of Boston.
27:06
As many people as you can get on one team and we're playing Red Rover.
27:09
Just a city-wide hide-and-go-seek.
27:11
A city-wide hide-and-go-seek, exactly.
27:12
It's not really fitness at this point.
27:14
I think it's children's games I've gotten into.
27:17
It's They're all horrible ideas, but I just thought that this segment is fascinating, dude.
27:21
I think that one day I could see myself doing this. Yeah. To make one of these? Yeah. Yeah. Yeah, they seem awesome.
27:31
It's like the You know how we talked about um like viral food.
27:34
It's like, "How do you make How do you make your restaurant go viral?"
27:38
Well, you need like some type of food that's either oversized or extra small or is a different color or it's typically a side, for example, uh cookie dough. make it the main.
27:48
Yeah, it's like cookie dough, you make that the main thing.
27:50
Or you mash up two things that don't go together.
27:53
Or you mash up two things that Yeah.
27:54
And I'm like, "What could you do for fitness?"
27:56
And I thought it was interesting.
27:58
I think it's the same idea.
28:00
By the way, speaking of beautiful settings Mm.
28:02
and doing races in memorable places, where should people be racing to right now?
28:11
I think they should race to wander. com/mfm. Why should they do that?
28:17
Well, it's actually a pretty good deal here.
28:19
So, if you go to Wander right now, Wander is a place where you can go rent beautiful luxury vacation experiences.
28:24
I booked in one right now, actually.
28:27
I have my assistant working on it this morning.
28:30
So, if you go to Wander, they do they're doing a special deal for MFM people, which is that if you go to wander.
28:34
com/mfm, you download their app, sign up.
28:36
You don't have to book a vacation or anything.
28:38
You are automatically entered into a luxury vacation getaway on behalf of us.
28:42
And so, they're going to be giving away a stay to one listener, which is amazing.
28:45
Your odds are actually pretty good.
28:47
This podcast not that popular. Could be you.
28:48
Maybe one in a 100 chance, who knows?
28:50
So, go ahead, download the app and and enter to win.
28:54
And if you download the app, you'll also get $300 off your next stay.
28:55
So, you get a discount and you get into the giveaway. But, check out Wander.
29:00
Dude, I was looking at some of these um properties.
29:04
The problem I have with Wander, I got a bone to pick with Wander, which is the pictures are so good that I started booking vacations to places I don't even want to go.
29:16
I just Like, normally you're like, "I pick a city and then let me find a place to stay."
29:19
Here, I went and I was like, "Dude, this house is sick.
29:21
I guess I'm going to Naples."
29:23
Like, where where am I going? I don't know.
29:25
Like, I'm going to Florida now.
29:27
I wasn't even trying to go to Florida.
29:28
And so, Well, they're they're setting They're setting expectations so high.
29:34
So, for example, have you ever seen um have you ever seen like people who take pictures of the pyramids and then they zoom out and there's like hot dog vendors and there's like You know what I mean?
29:43
Instagram versus reality type of thing.
29:45
Like, these photos are so freaking good.
29:48
If they zoom out, is there going to be like a trailer right next to the home?
29:52
Like, how are these so awesome? No, dude.
29:53
I've had people who use these for like corporate offsites cuz like some of these places are pretty baller.
29:57
So, they they use it to like do a There's like one in Sonoma I know my friends did for a corporate offsite.
30:02
And they were like, "No, it was sick. It was amazing."
30:04
Um there might There has to be I mean, these photos look so good that there has to be some version of like shoot for the stars and you still land on the moon type of thing.
30:10
But, uh yeah, if it's anywhere near as good as it looks, I'm uh I'm very excited.
30:15
You have on this document the difference between running a business for growth versus EBITDA versus cash flow. I'm interested. You got my attention.
30:23
Yeah, this is a CEO school uh tactical session.
30:30
When you were running the Hustle, did you Obviously, all of these things are good. You want growth. You want EBITDA. You want cash flow.
30:37
The problem is when you want three things equally, you usually get none.
30:41
Um so, there are gen- generally in any business at any point in time there tends to be some some order of priority.
30:48
Um when you were at the Hustle, did you which of these did you focus on and was there ever a shift in Oh, now we're focusing on this instead of this?
30:54
I didn't run the business long enough, you know, we sold like 4 and 1/2 years in to make the shift.
31:00
But, it was for the longest time it was revenue was the number one priority followed by cash flow, followed by profit.
31:06
And so, what I wanted to do was double revenue every year.
31:11
So, I think we went from like 500,000 in revenue to 2.
31:13
2 to like five to 12 or something like that.
31:19
And we didn't make a lot of profit along the way.
31:24
I think the year we sold, we did maybe a million in profit, but our cash flow was high.
31:27
So, I was able to add like $2 million to our bank account.
31:32
And explain to somebody who's like, "Wait, how do you have a million dollars of profit and two million of cash flow?"
31:35
How does that work in a business like the Hustle?
31:36
So, I'll give you guys an a really easy example.
31:39
So, we had this thing called Trends. It was $300 a year.
31:42
But, for the sake of this conversation, let's just say it was $1,200 a year.
31:46
And if a customer paid upfront, let's say they paid me on June 1st $1,200 for an annual subscription, my cash flow was $1,200.
31:55
That's how much my business accepted into our bank account.
31:59
But, the way that GAAP accounting, generally accepted principles of accounting, the way that works is that $1,200 was really only $100 in June, $100 in July, and $100 each month.
32:11
And so, my revenue was only $100 for month that they stayed with me even though I collected $1,200.
32:16
Thus, my profit, let's just say that it cost me uh $75 to produce the content, my profit was $100 minus $75. Uh so, 25 bucks. Exactly.
32:28
And so, I'm in a situation right now.
32:30
I have a business that my e-com business where we've been running it for maybe 4 years now.
32:36
And it's doing really well.
32:36
It's been I was only growth focused.
32:38
So, I was like, "You, I wanted to double or more every year." And so, we did.
32:42
We went from The reason being is typically, not always, typically, it's harder to grow revenue, but it's easier to once revenue is grown to become profitable. Exactly.
32:53
I think it's the right order of operations.
32:56
Actually, there there's one pre-step even before growth, which is just product market fit.
32:59
Meaning, have I made something that people want?
33:01
Do I feel like uh if I produce this that there's a market pull for this.
33:05
So, once we, you know, verify product market fit, great. Now it was grow.
33:08
I think in year one we did six or seven million.
33:10
I think in year two we basically got to 12 something.
33:15
Year three was bigger than that.
33:17
Now year four is bigger than that.
33:18
So, we've basically been you know, uh growing by somewhere between 50 and 100% every year for the four years.
33:26
But, I had pulled out exactly zero dollars from this business.
33:28
I have put in my pocket zero dollars from this business in four years. Wait, really?
33:35
Yeah, I've taken nothing out of the business.
33:36
I've reinvested everything, but it's not a Oh, I could have took a ton of money out of this business.
33:39
It's like, well, like for example, one year we basically had no profit.
33:43
We did, you know, eight figures of revenue and we were break even essentially.
33:48
And I was like, "What are we doing here? How did this happen?"
33:51
So, like the bank Did the but did the bank account ever go up?
33:55
Like, was your was your cash position ever good?
33:56
Well, in e-com you have one other variable, which is inventory.
33:58
And so, the the cash has been pretty steady, but the inventory assets are going up, but they're also inventory that might take a while to move. It might be slow. It might be whatever.
34:09
And so, you don't I don't want my cash tied up in inventory.
34:12
That is not actually the the plan.
34:13
That's a It's a byproduct.
34:15
Unless you can pay your employees and bills and inventory, it sucks. Yeah, exactly.
34:18
So, I've been going through this process where I shifted from where I first was in growth and then I shifted to EBITDA.
34:24
And so, um that required a certain set of skills.
34:28
So, I'll share with you some of the lessons learned shifting to EBITDA first.
34:30
So, we and we've successfully shifted to EBITDA.
34:32
And so, we EBITDA being uh earnings before interest, tax, amortization, uh amortization and depreciation. Exactly.
34:41
Um Okay, so what what did I do to make that shift?
34:45
The first thing was uh and the reason I'm saying this is because there's probably people out there who are running a business that's been high growth, low low cash flow, or high growth, low profit.
34:52
And um for some businesses, that's the right move.
34:55
You want to stay in that mode for a very long time.
34:58
Maybe it's a winner-take-all market.
34:59
Maybe it's a land grab situation.
35:00
Maybe you're venture backed and it's a billion dollar or bust. This is not that.
35:04
This is a business I own that I, you know, if we sell this business, it might be, you know, a hundred million dollars or less is is like where this will thing will land. But, that's great. We we own the business.
35:14
We have no outside um you know, investors.
35:17
And so, it's it's no big deal.
35:19
So, anyways, the point of this uh point of this branch is basically how do you make that shift?
35:22
So, I first went and talked to people who So, step one, figure out what the right EBITDA target is.
35:29
So, I go and talk to people who are in the same space to figure out what EBITDA margin is kind of the low end of what's possible to the high end of what's possible.
35:36
And then I ended up shooting for somewhere like, you know, the 60% mark. Like 10 to 25%?
35:39
Yeah, so for me that's like 17% uh margin.
35:43
So, the best ones were like, "Yeah, we have 25%." Like the e-com ones.
35:47
But, then you dig under the hood, it's like, "Oh, you don't do any marketing like somehow?" Well, I do.
35:52
So, that's just not going to happen.
35:54
Um But, getting to 17, 18% is like, "Wow, that would be really great."
35:58
And then the low end is like 10%.
36:00
So, that's the first thing.
36:03
Then, envelope uh create like a EBITDA what I call a EBITDA budget.
36:06
So, basically, you take for every $100 of revenue that comes in, what percentage is going to go to each of the following categories?
36:12
My overheads, my cost of goods sold, my OpEx, my advertising and marketing, etc.
36:19
And so, you create an EBITDA budget and you basically say, "What Where does the dollars flow today?"
36:22
So, you do a last 12 months look back.
36:24
You say, "Where On average every month we're spending 5% of revenue on overhead."
36:29
And, you know, 12% on uh in the e-com case, maybe it's shipping and fulfillment, whatever.
36:34
So, you create a current status budget.
36:36
And then you say, "Well, in order to get my margin, I need to find, you know, eight points of extra profit margin somewhere.
36:45
So, where's it going to come from?"
36:47
And so, you start to basically pull calories from from these different departments.
36:50
You say, "All right, marketing, you're going to have to give me two points here.
36:52
And shipping, you're going to have to find a way to cut off one point."
36:55
And you basically find the extra eight points of margin that you're going to need.
36:58
Eight points stuff is uh It's It's not hard to do it in a spreadsheet.
37:01
It's really hard to track it on a weekly and monthly basis to make sure that you It's really hard.
37:06
So, once I did that, now it's time to communicate.
37:10
So, step three, communicate the plan relentlessly.
37:12
So, I then go to the leaders of the company.
37:15
I say, "Hey guys, forget everything I said before.
37:17
Now this is what matters. Right?
37:18
Uh we still want to grow, sure. Secondary priority.
37:23
First priority is we're going to grow EBITDA. What's EBITDA?
37:25
Where Where are we tracking this today?"
37:26
So, I'll show them, "Hey, here's what it is.
37:28
Here's what it needs to be. Here's how we get there.
37:31
And here's the cadence of how we're going to track this."
37:33
And Now I put the the onus on them.
37:36
I said, "You need to find me one or two points of margin in your department.
37:40
Or you need to find me three points over here.
37:41
How are you going to do it?
37:42
So, come to me tomorrow or in two days with a plan of how you're going to get that extra margin."
37:48
And also, I want you to create a report that tracks this, you know, the sort of uh you know, if you're a cost center or you're a profit center of the business, you need to create a little dashboard and you need to show me how you're going to basically update that every single week or every single month. So, we do that.
38:02
And every single month I start hammering people on this.
38:03
And then, the fourth step is tie their incentives to it.
38:08
So, I go to my CMO and I say, "Great, last year your bonus was based on revenue.
38:11
This year, your bonus is based on EBITDA. You want your bonus?
38:14
And by the way, I'll actually increase your bonus.
38:17
You can We'll remove the cap.
38:17
You can actually get a bigger bonus if you're able to get even bigger EBITDA."
38:21
So, now it's on you to figure out how that happens.
38:24
But, if we don't hit our EBITDA targets, you get no bonus. Okay?
38:25
So, now incentives are aligned to achieve that thing.
38:30
And so, those are the kind of the first four steps.
38:31
Last step, which is basically actually go do the thing over and over and over again.
38:37
Somebody gave me some great advice along the way.
38:38
They go, "Oh, you're in EBITDA mode?"
38:40
Yes, called spring cleaning.
38:43
So, here's what you're going to do.
38:43
You're going to go and you're going to say, "There's got to be some low-hanging fruit."
38:45
You're going to go and you're going to find a bunch of SaaS subscriptions that you should cut off.
38:48
You're going to find this this agency you're paying too much.
38:50
You realize, "Ah, we don't need that agency." Whatever it is.
38:54
And you're going to feel like, "Cool, we cut the costs."
38:57
Schedule a calendar reminder.
38:57
In 30 days you're going to do the exact same thing again. Yeah, man. I love it.
39:01
"Well, we we already cleaned it up."
39:02
But, it's just like cleaning a house.
39:04
You first clean out the surface level mess.
39:06
Once that's gone, now you start to realize, "Oh, wait, we never actually dusted this area or this closet and actually stuffed."
39:12
Now let's start to unpack this closet.
39:13
And so, we've done, I would say, three or four of these spring cleanings now this year and it's only six months into the year.
39:19
So, I've done it at least three times, maybe four.
39:23
And each time we go and we unearth more stuff.
39:26
And you can't do it every day.
39:28
That's not the right way to focus on it.
39:29
But, like, you know, on a monthly or every two months basis to go back through and say, "All right, let's let's trim some more fat. Where's more fat?"
39:37
And inevitably, you will find more things.
39:38
But, why are you Why are you Why are you going after EBITDA?
39:42
Because So, uh I I'll mention this a little bit, but if people rag on me, I'm not like incredibly well versed, but I've been looking into like EBITDA might be Like so, there's this thing called GAAP, generally accepted principles, whatever.
39:56
It's like what we all like abide by.
39:59
There's a lot of in there.
39:59
Why EBITDA versus cash flow?
40:03
Cash flow also works Cash flow required me to do a second big project.
40:04
So, the second big project was Okay, where's that cash going?
40:08
Why doesn't the cash go in my pocket?
40:10
Oh, the cash goes into inventory.
40:11
And so, separately we did this like after I did the EBITDA clean up first, first couple months. I said, "Okay, great.
40:17
Now the EBITDA is great every month.
40:19
But my bank balance is not going up proportionate to the EBITDA."
40:23
And so, first 3 months of the year we killed it on EBITDA. Awesome. Where's the money going?
40:26
Oh, it's going into inventory.
40:28
How do we get our inventory levels to be right-sized so that this cash flow flows to the owners of the business and not to the warehouse.
40:33
Cuz today it's going to the warehouse.
40:38
And um which is a separate challenge and a separate discipline altogether.
40:40
And it's a three-legged stool.
40:42
You need all three legs to have a amazing business.
40:44
You need a growth leg cuz if you're not growing, the business is not worth very much.
40:50
Um you you you need profit.
40:50
If you don't have profit, business not worth very much.
40:54
And then you need that profit to result in free cash flow.
40:56
And if you can get all three, you have a beautiful amazing business.
40:59
But in order I kind of wanted to go in in those three because again, there's not going to really be much cash flow if you're operating at a net loss.
41:07
So, I needed to first be making sure there's a surplus of profit.
41:11
Then I needed to make sure that surplus of profit is resulting in free cash flow.
41:14
And you just so happen to be in an industry where those EBITDA and cash flow things they're really hard.
41:19
It's really hard like to figure out the inventory and stuff like that. That is a science.
41:25
I uh I am not envious of people who go through this.
41:28
My major takeaway is e-comm is a terrible business to be in.
41:33
Um When is it not a terrible business, though?
41:35
If you are If you are winning the game and you still think it's a bad bad category to be in, that's when you know it's a bad category.
41:41
Most people, they lose the game.
41:43
They're failing at it and then they blame the category. Right?
41:47
Uh so, for example, and and the opposite is true, too.
41:49
I was telling somebody about podcast.
41:51
Oh man, podcast is great, blah blah blah.
41:52
He goes, "Well, yeah, you won the lottery.
41:54
So, of course you love lottery tickets.
41:55
Like, you know, your podcast is popular. It works.
41:59
Like, of course podcasting is great for you, but for the million podcasts that are not really getting listened to, is it would you would it feel the same way, right?
42:09
Is it winning And And so, this one's interesting because our e-comm store is winning.
42:12
And even in winning, I'm like, note to self, this is not the category to be in next time.
42:18
Um Beyond that, I would say playing the game on hard mode has a bunch of disadvantages and I wouldn't put myself in this position voluntarily.
42:26
However, once you're in a position where you're playing some game on hard mode, there is one big benefit, which is if you ever get to play an easier game, you will dominate.
42:35
It's like a It's like I was playing pickleball with a guy.
42:39
It was his first time playing pickleball. He's amazing.
42:40
I'm like, "Yo, what are you doing?"
42:42
He's like, "Well, I'm playing college tennis."
42:45
It's like, I played a harder game and I won that game.
42:47
So, like, yeah, I'm pretty good at pickleball.
42:51
It's not so It's not that hard for me.
42:52
In the same way, I was listening to uh Andrew and Chris from Tiny, they were doing like a Q&A and they the guy was like, "Yeah, I'm in e-commerce D2C.
42:59
Would you guys say you don't love that space?
43:01
Would Would you recommend I just quit? What should I go do?"
43:05
And he goes, "Well, one of the things that worked for us was because we ran agencies, which are can be low margin grindy businesses with a bunch of HR problems and hard to scale, because we did, you know, once we went into easier businesses, we just cleaned up.
43:18
We could buy a software business that was running at 10% margins and get it to 40% just cuz that guy wasn't really He wasn't willing ruthless with pricing.
43:25
He was not negotiating with vendors.
43:27
He was not, you know, taking care of, you know, all these little things that we had we had to do to survive in these other categories that in a softer category, you're you're not as on the hook for.
43:37
Who do you think is winning in e-commerce and what attributes do they have?
43:44
Shopify, Facebook No, I mean, of course, of course, of course.
43:48
Retailers, uh D2C, whatever you want to call it.
43:53
I think right now the retailers that are taking advantage of TikTok, the TikTok flywheel, are cleaning up.
44:02
And what I mean by that is there is a very specific moment of time right now where you can create content on TikTok, either yourself as a brand or even better, you use an army of affiliates and UGC creators.
44:17
And whether it's with TikTok shops or people just hear about the brand so much on TikTok they go Google search it and they find your Amazon or they find your D2C shop, that flywheel, I'm invested in a couple of companies that are doing this, that flywheel is pretty unreal right now.
44:29
But only for certain categories, I would imagine.
44:32
Is it only for things where young people are using? Nope. That's amazing. That's ridiculous. Right? on. I've said too much.
44:41
All right, I want to talk about one thing that you actually had on here that I have no idea like it's it's way out of character for you.
44:51
Your dream house or or do you want to do painted chickens?
44:54
Well, I don't have much to say about the dream house except for dude, look at this sick house.
44:59
That's the entire topic, but let's go there. It's an amazing house.
45:03
This is a house that uh this guy on my team uh sent me. And I can't believe it.
45:10
It's the most beautiful house I've ever seen in San Francisco.
45:13
It's 11,000 square feet, estimated market value $23 million.
45:18
It's on the ocean in San Francisco.
45:18
I mean, there's just a few photos.
45:20
So, this house is First to get a 11,000 square foot home in San Francisco is very, very hard to do.
45:27
Every view is like the Golden Gate Bridge.
45:29
You're right on the water.
45:30
You're right on the ocean.
45:30
But even if you didn't want to go in the ocean, well, guess what?
45:33
You have an infinity pool in the back that's just just spilling over into the Pacific Ocean.
45:35
On top of that, there's one photo in here that I just have to show you.
45:40
I see a beautiful uh porch that's overlooking the San Francisco Golden Gate Bridge. Next photo, 24.
45:47
Like a wine cellar that is big enough that it was bigger than my childhood bedroom. 25.
45:54
A huge home theater that looks like they're just watching like some type of nature documentary. So, awesome.
46:03
They're sitting And here we Here it is.
46:04
The reason I I want this home to begin with, 26.
46:06
A half court basketball court with all windows where you can see the Golden Gate Bridge. This is awesome.
46:13
Is this Floor-to-ceiling like 25-foot uh ceiling, all glass window.
46:18
You're seeing You're looking at the ocean, the breeze.
46:19
It's all There's a glass door that's open.
46:21
You see the Golden Gate Bridge and you have a beautiful basketball court inside your home with all all this light wood that I just love.
46:32
Oh my god, this is crazy, dude. This house is unreal. I must buy this house.
46:36
It's not for sale, so that's the first problem.
46:38
Um But besides that, I am I now have a target. I now have a desire.
46:45
You know, I thought I had enough money. Now I have a desire.
46:48
I need to be able to drop 30 million bucks on this house.
46:51
Dude, in order to buy a $30 million home Oh, check this out.
46:54
The Okay, so it was owned by Sharon Stone.
46:56
Before that or after that, do you know who owned it? A dentist.
47:00
A dentist owned this house. What the hell?
47:03
Yeah, it says this guy was a dentist.
47:05
In order to buy a $30 million house, I'll tell you how much money I need.
47:09
28 million and then I'm going to borrow two and I'm going to buy this house with every dollar I own and that's it.
47:15
No, I think you need a I think you need $100 million to buy a $30 million house.
47:18
Would you say that's accurate?
47:20
Probably at minimum, yeah. At minimum.
47:22
Cuz the main the maintenance, the taxes on on a house like this is going to be pretty insane, too.
47:25
Like, your carrying costs are going to be what?
47:28
Half a million to a million bucks a year?
47:31
Yeah, it could be No, it doesn't Well, it could be that it would be that high probably because you're on the coast and you got the sea water.
47:36
taxes alone in San Francisco of this on this house is going to be like quarter million to $300,000 a year.
47:40
That's just the property taxes.
47:41
So, all the maintenance, all the insurance, all the all all the cleaning, all that stuff on top of this thing is got to be at least another quarter million.
47:50
So, at least half a million bucks. Yeah, that's insane. That's insane.
47:55
This is a It's a sick house.
47:55
The The last thing I wanted to ask you about you said you wrote some essay.
48:01
Yeah, your boy's getting his Paul Graham on.
48:02
I started writing essays. Why?
48:06
I told you I'm just in a creative season and I wanted to do different things.
48:07
I like writing and I was like, "Well, what do I want to write about?"
48:11
I realized I want to write about the stuff that I'm curious about or whenever I feel like I have a um a golden insight.
48:18
So, something that anything that feels insightful to me, I want to be able to write it down.
48:22
And why do I care about that?
48:24
You want to spread your seed, baby.
48:26
You got to spread that seed.
48:27
Well, that's part of it, but I actually the bigger part is I've known there's this feedback loop that happens, which is once you have to deliver something, you start to look for it.
48:36
Meaning, when we start this podcast, let's say every week we got to do this podcast.
48:40
When you show up to this podcast, you got to have three interesting business things to say, right?
48:43
You need to have three interesting business topics.
48:47
And in order to do that, your brain starts to now go see interest Go find interesting business topics.
48:52
Starts to ask a few more questions.
48:53
Starts to write a few more notes.
48:55
Starts to pay a little more attention.
48:56
And this wonderful feedback loop gets built where you start getting smarter about business more because you have this outlet where you got to go put it.
49:04
And you're on the hook to go put it somewhere every so often.
49:07
So, in the same way, one of my favorite things is to learn something new, right?
49:10
I'm a just kind of like a learning junkie, right?
49:12
Well, what By having a place to go write it, I now am hunting for more insightful things. I'm reading more.
49:18
I'm talking to people more.
49:20
I'm having more, you know, connections between two different ideas that are disconnected.
49:23
And so, that's the real reason cuz I the thing I shared with you, I haven't even published yet.
49:27
I'm going to publish all these on my website, just shaanpuri.
49:29
com, but right now this one's on a Google Doc.
49:31
I'll throw it up after after this so that it's at least online.
49:34
So, So, essay's called paint painted chickens.
49:36
And uh our painted chicken.
49:39
And the reason it's called painted chicken is because have you ever been inside of a Subway? Do you eat Subway? When I was a kid, yeah.
49:45
And so, I like Subway, I admit it.
49:48
But Subway, the quality has gone like way down since I was a kid. I can't tell.
49:52
Has the Has the quality gone down or have our taste gone up?
49:57
No, the quality's gone down. You know I know this?
49:59
Do you know all the controversy with Chipotle right now? No. No.
50:04
Dude, like Gen Z hates Chipotle. Why?
50:08
So, basically there's things are trending on TikTok.
50:10
There's like Chipotle gypping you on quantity. Okay.
50:15
Or just like you know, basically like the way that this like Chipotle used to be bomb, now it sucks. Here's why.
50:18
And different people have different reasons why, the taste.
50:21
But one of the big ones is like they're just skimping on the on the thing.
50:25
And then then the the CEO came out and did this hilarious thing. You didn't see this? It's so funny.
50:29
The CEO came out and he goes Oh, man.
50:33
Look, if you go into a Chipotle and you want a little bit more, our guys are great about this.
50:37
Just You just give them the look.
50:42
And he does this like stupid look.
50:42
He's like, you do that, our guys are and girls and girls.
50:45
Our guys and girls are great at at at hooking you up with this.
50:50
And so, there's all these memes now of people being like Yeah, when I go into a Chipotle and I make this face.
50:54
Like their reaction which is like they're not like, I got you, bro. Let me hook it up.
51:00
And these and they're like also impersonating him where they're like When you go into a Chipotle and you give the look, our guys and girls and trans and and black people, too.
51:09
They're they're all great at doing this.
51:11
And people are making fun of this CEO for like you know, flubbing this this this speech that he gave.
51:16
So, anyways, Chipotle's under the microscope right now.
51:19
Well, now they all like Cava, which I just went to. It's awesome. Yeah, they like Cava.
51:23
Well, one of the reasons so then the founder of Chipotle I think came out or somebody who's like the ex-CEO came out. And he said two things.
51:28
He goes, it's insane that people think we would tell our staff to like skimp on portions.
51:34
That's terrible for business. Like we've tested this.
51:36
The thing you do for business if you want to grow revenue and grow profits in a store is you give people bigger portions, which makes them love the place and come back.
51:44
Sales go through the roof and waste also goes down cuz you're giving them the food versus throwing it away.
51:50
If you actually want to save on food waste, it's not by doing less portions, it's by having more customers first so that you sell through all your food.
51:58
That's the way you reduce food waste.
52:00
It's not by skimping customers and then they don't come back cuz they're angry, right?
52:03
Like that would be counterproductive.
52:04
The second thing that came out was the guy said Basically when Chipotle had all those E.
52:09
coli scares they had to change their whole supply chain.
52:14
I don't know if you remember this.
52:14
Like there's a couple years ago where like two, three times. Like, whoops. Whoops again. Oh, E. coli again. Sorry about that.
52:21
So, they changed all of their operating procedures.
52:22
So, what they used to do was in the store in the back, they that's where they would, you know, chop the veggies right there. They would do whatever.
52:29
Now it all comes pre-bagged, sealed from like a central headquarters where they can have really tight food safety, vacuum seal it or whatever, ship it to the store.
52:37
Store just has to open it.
52:38
They're not doing the food prep on site.
52:40
Well, the result of that is the food tastes less fresh.
52:43
And the result of that is that they say they cut down the number of suppliers they were working with cuz there was too much risk.
52:48
So, instead of local product local farms for the meat they now started to go into a few vendors that are now shipping out much farther distances and maybe are more mass production, less less taste.
53:00
So, the taste actually has gone down, not just the taste, but because of the supply chain changes.
53:04
So, they need to they need to bring back E.
53:05
coli or whatever was like Yeah, dude. Let's roll the dice.
53:09
Let's live a little, right?
53:10
Like Like the food's got to taste good.
53:11
Who cares if you get sick once a year?
53:13
Which is insane if they sell if they serve millions of customers when it's like four people, you know, that is that's like statistically insignificant I would imagine.
53:22
Which is always the worst argument.
53:23
Like whenever one of these social networks they're like, dude, do you realize like they're getting hammered by Congress and all they want to say is there's 2 billion monthly active users.
53:32
How many people are in your state?
53:32
How many murders are there in your state per day? Do I blame you? No.
53:35
I run a state 100 times bigger than yours.
53:37
Like they can't say that, but that's the the reality is the law of large numbers.
53:41
If you're Facebook, literally anything that can happen is going to happen on your platform every single day.
53:48
That's just the rule of statistics.
53:50
Even the most like oddest, strangest, most screwed up behaviors are going to happen cuz it's so many people. It's insane.
53:58
Yeah, and so now they've had to change this whole thing.
53:59
But what was your essay about then?
54:01
So, my essay's about I call it painted chicken because if you go to Subway, Subway's motto was eat fresh.
54:05
And if you go into Subway, it's just hilarious to hear eat fresh.
54:09
And then literally he's opening up a bag of chicken and you see the chicken and the chicken has grill marks on it.
54:15
And but you're like, hmm, how come all the grill marks are so uniform?
54:19
What kind of grill do they use?
54:19
And if you go look it up, that that grill marks are painted on.
54:22
They don't grill the chicken.
54:24
That's not what those grill marks are.
54:25
The grill marks the grill marks are literally painted on the chicken.
54:29
And so I I love this analogy because in every business there are there's always lip service.
54:36
You know, every business has these stupid things that they say.
54:37
Go go read the website of like BP and BP will be like, we care about communities and the environment.
54:43
And they're like spilling oil into the ocean, right?
54:44
Like everybody has their their version of eat fresh, which is you say eat fresh and then you just you're painting on chicken.
54:52
And so, what I what I wanted to talk about was what are the few examples where there's not painted chicken?
54:58
Meaning, what are the examples where a company has values that they actually live by and they actually mean something.
55:05
Because I think anybody would agree that like a a value system is very, very important.
55:08
I remember my first business I was trying to make a decision. We asked our mentor.
55:12
We're like, oh, we're doing a sushi restaurant thing.
55:15
It was like, should we use the eco-friendly packaging?
55:16
But it's more expensive and it's kind of like the paper straw, it disintegrates.
55:19
But it's good for the environment.
55:21
Or should we use this one that's cheaper, bad for the environment and it's super durable.
55:24
It's actually good packaging.
55:28
And she was like Well, you're asking the wrong question.
55:31
You're asking the question of which packaging should we use?
55:33
But the question is what do we value more?
55:35
The environment or the convenience and affordability?
55:38
There is no right answer.
55:38
It's just a question of what you value more.
55:41
And you should just all your decisions need to come upstream.
55:43
Move your decision-making upstream.
55:44
Once you know your value system, everything becomes obvious after that.
55:48
And this is just a good life a good bit of life wisdom.
55:49
If you're if you're in a situation where you don't know what to do with somebody.
55:54
Oh, should I They treated me this way, but I should should I respond kindly? Should I be mean back?
55:59
Should I Should I ignore them? What should I do?
56:01
Well, if your value system is I'm a kind person, that's what I do.
56:04
I don't change my behavior based on other people.
56:06
Well, then the answer's obvious.
56:07
Just be kind and move on, right? Like that's it.
56:08
So what I started to look at was what are the company values that I actually remember that meant something to not only me, but but the people who worked in that company.
56:18
And the first one that comes to mind is Facebook's move fast and break things. Yeah, I loved it.
56:23
You I like I think you've heard that.
56:26
Everybody's heard that phrase by now, right?
56:27
So, I said, hmm, move fast and break things.
56:29
Like, okay, that's great.
56:32
Is that popular because Facebook is popular?
56:33
Like maybe it's just a popular value cuz Facebook was so popular.
56:37
All right, that's theory one.
56:37
Well, Sam, what's what's Microsoft's core value?
56:41
What's Microsoft's move fast and break things? I have no idea. Twitter, Lyft, Uber.
56:46
You pick any of these companies, right?
56:47
Do you Do you know any any of them?
56:49
Like no, we don't know any from any of them.
56:50
In fact, the only other one that I could remember like move fast and break things was Google's.
56:54
Do you know what Google's is? Do no evil. Yeah, don't be evil. Exactly. Don't be evil.
56:59
Um but then it got it got silly because they maybe did a little evil. Ex Well, exactly.
57:05
So, then I was thinking, well, here what do we what do we what do we learn from this?
57:08
So, the first thing I learned is maybe these are memorable because they're catchy, right?
57:11
Maybe that's the first thing, which is that instead of just saying integrity, you should you should say don't be evil.
57:17
Don't be evil is more provocative. It's more catchy.
57:20
It's more interesting than integrity or honesty or be good, right?
57:25
If they just had be good versus don't be evil, none of us would remember that Google's value is be good.
57:30
But a lot of us paid attention when they said our value is don't be evil.
57:32
So, I think there's something to lesson one is if you make it provocative, you make it memorable.
57:36
If you make it memorable, people might actually use it.
57:38
So, that's the first first little takeaway.
57:40
The second is well, there are other catchy, rhyming thing.
57:44
You know, there's you could just try to be catchy.
57:46
Like the the quicker picker upper. That's that's cool.
57:47
But why does why does move fast and break things have a little bit more weight to it?
57:53
I think it's because it you have to pay the price. It's right?
57:57
So, you got to pay the cost to be the boss.
57:58
And what I thought was interesting was if I went to 100 CEOs of Fortune 500 companies and I said Hey, we think that you should you're the company should move fast.
58:07
That speed is an important value.
58:11
Speed's important, right?
58:11
Moving fast, would you say that's a value for your team? Of course.
58:15
100 out of 100 would nod their head and say, yep, of course. Definitely. We value speed. Awesome.
58:22
And if you say, well, when you move fast like naturally something sometimes things might go wrong.
58:26
You might You might bump into some things.
58:28
You might break some things when you're moving so fast.
58:29
So, let's let's let's agree that it's actually it's going to be move fast and and break things.
58:36
How many of the out of the 100 would now agree?
58:39
And the reality is that 99 would be chicken and they would be like, well, no, no, no.
58:42
We're not trying to break things around here. Well, it depends.
58:45
It's it's speed without breaking things.
58:46
And once you go to speed without breaking things, you're now Subway eat fresh painted chicken. You're right?
58:52
It's now a unusable, non-useful value.
58:54
It might be something you put on your website, but it's never going to have any weight.
58:59
You're never going to be one of these generational type of companies that operates differently and is known for how they operate.
59:03
And so I went and read this quote from Zuck and I want to read this to you.
59:07
So, he says The value is actually move fast.
59:09
But my theory on values is that most organizations have a lot of values that don't mean very much.
59:14
They're just table stakes.
59:16
Like if you say just be honest, of course you're going to be honest. You should be honest.
59:20
Everybody agrees with that. Everybody knows that. It means nothing.
59:23
It's not an option to not be honest. That's automatic.
59:25
So, he goes, I think the defining principle for a company, meaning your company's going to have one thing that you guys really do as your A+ strength.
59:33
Should be something something more interesting that has a trade-off.
59:36
So, move fast is interesting for us because we had to give something up to get it.
59:41
So, the question is actually what are you willing to give up?
59:45
Values are not free, nothing is. Dude, that's insane.
59:48
I mean, what an insightful person to I mean, he's just like an eloquent guy for how young he was.
59:55
I mean, that's a that's a that's a really good uh quote.
59:59
And so, if I think about other great values that have like had resonance and stuck with people and meant something to people, you know, for example, Nike's this is more of a slogan, but just do it.
1:00:09
If you think about the the phrasing of just do it, is is Nike's just do it as powerful if it just said, "Do it." or "Do things."
1:00:19
Like it's it's very different.
1:00:19
Like the word just changes it cuz just implies there's a cost.
1:00:23
Just implies that that it's don't hit the snooze button.
1:00:28
Don't don't shy away from it. It's going to hurt.
1:00:31
It's going to be painful.
1:00:33
It's going to be uncomfortable, but just do it.
1:00:34
And so, I thought there's something to learn in that.
1:00:35
It's kind of inspiring for me.
1:00:37
So, my my my essay was basically um if you want your culture, your values to mean something, and my friend Seki has this great phrase.
1:00:46
He said, "Culture is There's many ways to define it, but the best way is what do people do when the boss isn't around?" I I love that.
1:00:51
I thought that was pretty powerful.
1:00:52
It's your default behavior.
1:00:54
And if you want your default behavior to to mean something, to to be different, to be a defining character of your company that is different than the way other companies in your space operate, here's the three-step formula, which is you choose one thing, not 10 things.
1:01:05
So, for fast for Facebook, it was moving fast.
1:01:08
For Apple, it's thinking differently.
1:01:10
For for Nike, it's action.
1:01:12
Um then you make it real by acknowledging the cost or the trade-off.
1:01:16
And lastly, you make it catchy. You make it provocative.
1:01:18
You phrase it in a way that's going to turn heads.
1:01:19
So, that's my that's my essay called Paint the Chicken. First, that's awesome.
1:01:22
Second, have while you're on this little like value-driven, mission-driven company uh quest, have you heard of this company called Brunello Cucinelli?
1:01:31
You probably haven't because it's not your stick.
1:01:33
But they make a lot of things that are expensive.
1:01:36
No, it's this Italian company that makes really expensive cashmere clothing.
1:01:41
And their most famous their most famous thing is like uh sweaters.
1:01:45
So, Dog, I'm I'm wearing a free t-shirt made out of 100% polyester from a YouTuber, bro.
1:01:49
Yeah, that's why I knew it wasn't your stick, but it's not my stick, either, but it kind of has is becoming it because I like it so much.
1:01:57
But Brunello Cucinelli, the founder started it because he was like an expert at I guess cashmere.
1:02:03
Like he was I don't know what the term is, but he he knew how to put together clothing, and he basically was like, "You know, my dad worked his ass off.
1:02:10
He was working 7 days a week, and I wanted to create a humane workplace.
1:02:16
And so, we're going to do that by creating these amazing sweaters where we hand stitch and it's done perfectly. What do you say? It's done beautifully.
1:02:23
Uh and he makes these really high-end sweaters.
1:02:25
And the clothing is great, whatever.
1:02:27
But what's more interesting is this guy, the founder.
1:02:28
And I just saw that someone shared this uh photo of his schedule. 6:00 a. m.
1:02:33
, wakes up at his countryside home, slowly gets dressed, goes to the office at 8:30, and then he says, "At 1:00, I walk home for lunch.
1:02:43
Uh then I take a 30-minute siesta.
1:02:43
At 3:00, I go back to work.
1:02:44
At 5:30, the whole company stops working and takes a late afternoon walk because we believe that uh rest is super important to being uh soulful, and personal study is important as well.
1:02:55
He has light supper at 8:00 p. m. , and from 9:00 p. m.
1:02:57
, he heads out to the cafe to meet friends where they discuss politics, philosophy, religion, and other subjects late into the night."
1:03:04
And I was like, "Is this guy legit? Is he the real deal?" He is.
1:03:07
So, this company, this sweater business, it's a publicly traded company. I didn't realize that.
1:03:12
It's a publicly traded company with a market cap of like $4 billion.
1:03:17
He's building his company to build a great workplace and to great create great products, not to make money first.
1:03:23
And it's just because of that, I want to give him more money, and he's going to make more profit.
1:03:27
Yeah, I'm on the website right now, and it's you know, just from a swipe file, like you know, there's so many little things that they do in their branded marketing that is congruent completely congruent with everything you just said.
1:03:39
One of the great marketing lessons I learned a long time ago was somebody said, "Yeah, it's got to be epoch." I was like, "Epoch? What's epoch?"
1:03:47
E P O C, they said, "Every point of contact."
1:03:49
So, they said, "Once you decide what you what you're all about, every point of contact."
1:03:53
Meaning, when somebody hits you in on your if you're all about luxury, but then your customer service hotline is like some janky old web form, it's not every point of contact.
1:04:04
Like I'm looking at, for example, one of the little gifts on the site for you know, he's just like go go click on the sweater section or whatever.
1:04:13
It's this guy, and it's a model, but the model he's peeling an orange, and he pops like an orange slice into his mouth. He's kind of wandering.
1:04:18
He's like walking a little slightly aimlessly.
1:04:21
He's just sort of like he's chilling.
1:04:23
He's not trying too hard. He's enjoying himself. He's right by the water.
1:04:27
And I'm like, man, the creative direction to say, cuz you know, normally, what you say is you have the founder who's got their beliefs, then you have the revenue team that's trying to jack up revenue, and they're adding pop-ups on the website try to make it like, you know, improve conversion.
1:04:39
Then you have the creative director who's not even invited to the meetings, and they're trying to do one thing over here, and it is not congruent at all.
1:04:46
And people whether they can see it or not, they feel it.
1:04:49
And you could feel when something is congruent.
1:04:51
It's the same reason the Apple store looks the way it does, and the iPhone looks the way it does, and the packaging looks the way it does, and the commercials look the way they do.
1:04:59
It is congruent when it's done well as a brand.
1:05:02
But it's very rare to see that, to be honest.
1:05:04
Yeah, these guys are on top of it. Now, I like him.
1:05:08
I don't know if I want to spend like I'm looking at $1,500 for a polo.
1:05:10
I don't know if I'm there yet, but I'm definitely thinking about it.
1:05:15
Maybe I'd buy a Maybe I'd buy a $2,000 sweater, but like everything they have is high-end.
1:05:21
Like it's one of those to attract a good customer, and I think he has repelled me successfully.
1:05:25
I am I would not be a good customer of this.
1:05:30
But you know what's cool?
1:05:31
You said he has his his schedule, light supper. Light supper.
1:05:37
I don't think I've ever had a light supper.
1:05:39
I'm I'm eating heavy dinners over here.
1:05:40
And I just realized just changing the words.
1:05:43
If I said if I just changed my words, I said, "Okay, what am I going to have for my light supper tonight?"
1:05:48
I bet that would fix my diet.
1:05:50
Just that one You change your words, you change your life.
1:05:52
I bet you if I just changed that one word, light supper.
1:05:53
It wasn't even in my goddamn vocabulary until just now. Uh thank you. I'll be taking that. Um is that it? Is that the pod? That's it.