All right, now we're ready for part two of the million awards. We've got a bunch of categories like breakout company or product of the year. Who is the craziest slash most delusional person we met this year? As well as things like our favorite content books, podcasts that we consumed.
What is the best and the best and one of my favorites is unsexy business of the year. So what's a business that on the surface looks maybe boring or flies under the radar, but actually secret, crushes it each share our own. So enjoy part two of the million awards. I feel like I could rule the world.
I know I could be what I want to put my own in it like a day zone. All right. Next category that we have is the craziest, most delusional person that you met this year. So somebody who is kind of out there, they broke your frame a little bit and it could be good.
Delusional crazy. It could be bad. Delusional crazy. There's this is just saying this person thinks way differently than you and they're a bit like they're living in their own world.
And so this was a tough one for me. I was a tough category. Sam, who did you have? So the easy one was Elon Musk.
Do you guys, we already forgot about Elon and Zuck almost got to fight. That was hilarious. I think Elon's insane, but I didn't want to pick him because that's too easy. So I chose this guy named Val who I've met via Hampton.
You probably have seen him on Twitter. His name's a so like basically Val was under the radar for years and years. I mean, he's probably 45 years old. So he just used to use in Twitter, but he built a bunch of businesses.
He was a Soviet Union immigrant came here to America, age 19 built a business that made $10 million in profit in year one. I started hanging out with him. And now he's got this massive set of businesses that probably do like $150 or $200 million a year in revenue that he owns. He's never raised money for any of them.
I invested in right when I met him. I invested in one of his real estate deals and he was new to it. And I got a great return. And so I did another one with him.
I started talking to him. He's like, yeah, we own this many tens of millions of dollars of Brooklyn real estate. And I was like, Val, how'd you figure out to do this? He goes, well, I just did the math and I did this and he was so logical and yet so calm about it.
He wakes up at 4am and he starts working at 3pm and basically works until 4am. And that's his life. And I'm like, there's so many reasons why that's bad. And he was calmly just saying, like, yeah, but it works for me.
And he's got five kids. I love people that got the kids. So this guy's the best. He seems like a good dad and good husband, but he does crazy business stuff.
Just absolutely crazy, but he's so calm about it. So he's one of the craziest people that I've ever met. Andrew, you want to go next? Sure.
So I actually struggled. I think I said Brian Johnson. He was the person that comes to mind. He's really, really nice, interesting guy, but definitely crazy.
All the health stuff he's doing. Elon Musk is another obvious answer. But I actually couldn't think of somebody that was crazy. And so I actually inverted it.
I said, who is the same as Thomas most boring person? And Chris and I got to meet Michael Dell this year. And Michael Dell is worth $65 billion. That's insane.
And we sat down with him. I'm going like, OK, I'm going to crack this guy open. Right? Like you read his book.
It's all very tame. His public persona is very serious and calm and nice and all that kind of stuff. His book is literally called Play Nice Better Win. And so me and Chris, we go into this office.
You know, so we go into this huge gray office park. We're in this boardroom and he sits down with us. And Chris and I just walked away. We're like, oh my God, he's like, I can't believe it's not butter of billionaires.
Like he's just like steady, steady, super nice. And we're asking, we're like, dude, what do you do with your money? Like, you know, have you gone? Like, have you, you know, do you own 20 houses?
Do you own a bunch of planes? You do anything crazy? He's like, Nope, I just love, you know, operating my business and growing it over time. I own two nice.
I think he owns two nice or three nice houses. Obviously they're very, very nice houses. One plane. And that was it.
We couldn't get anything out of him. And he told us this anecdote. So this is how much of a baller he is. He goes, yeah, so about 20 years ago, I took 200 million and I started a family office.
And in the family office, I wanted to make like a 10% return. And so I hired these really smart guys and they started doing private credit. And I don't know if you guys know what that is, but usually it's lending to people that the bank won't lend to. So it's higher risk lending.
And one of the people he lent to was a, I think a billionaire who owned a hockey team. I think in Dallas or something. When you were saying that I was thinking of like your cousin down down the street, who's like going to go buy like a rookie LeBron card and flip it. I guess.
Totally. So he goes, he goes, yeah, then one day I just got a call. And they said, well, you own the Dallas stars now. I think it was Dallas stars, but some professional sports team.
And he had just literally just owned it because he had lent the guy money and the guy defaulted like that's how much of a baller Michael Bell is. Dude, he totally S B F. You're ass. Elizabeth Holmes, you I bet you Michael.
He's way more vase. Dude, no, basement's got something crazy in it. This guy is lying to you. Michael Dell is in order to get there.
Andrew, you know, more than me, but in order to get there, you have to be the sharkiest of all sharks. I don't agree with that. What? I think you have to be, you have to be very aggressive, but I do think you can, you can be a, you have to be a wacko, right?
You have to go, you have to be a maniac. You have to go extreme, but I think he could be nice. Dude, have you ever used a Dell computer? A Dell computer is the technology equivalent of what you just described.
It's like the, the most, can't believe it's not butter of computers. That, that, by the way, I don't even know what that analogy means, but I love it. It just made sense what he said. It's kind of an insult, I think, right?
No, it's like, he's just like straight forward, you know, it's like saying someone is like, you know, there's a missionary position of lending and it's like exactly just this means it's like, oh, right? And it's like, yeah, but you don't want to be called missionary. So dad jeans, a billionaire is John. What's like nicest guy ever?
Yeah, right, dude. No, I swear to God. Right when you walked out the room, he was probably just like, here's how I know. Here's how I know.
You can always tell whether someone's like a psycho or scary based on how their employees talk about them, right? Their employees love him. They gosh about him. They're so nice.
He was so respectful to everyone. Someone came in and brought water to him. He looked them in the eye and said their name and said, thank you. Like he's a nice guy.
A profound story. I was amazing. All right. So this was kind of tough, but then I realized I had an answer.
So I did a call the other day with a guy, Ben was like, you got to meet this guy. And then I'm at a brunch and Ben's thing is he always says, this guy's got the juice. I was like, I was like, the juicy guys. This guy's overflowing with the juice.
I was like, all right, I got to meet this guy. So you don't seem like a brunch guy. What were you doing? I was at brunch.
Ben was at the brunch. Um, so, you know, like when people used to fight back in the day and they'd be like, I nominate my second to fight for me. That's bad. Ben's, but there's all the fighting.
He gets out of the real water meets people. So anyways, he's like, he's got to call and the guys like he starts talking and immediately I love him. Why? Cause I love the Middle Eastern accent.
Anyone who's like Persian, Iranian, my friend, and I'm like, oh my God, I look like they can tell me any story. They can tell me that same Michael Dell story and I would have felt like an HBO documentary. Like it's so good to me. So anyways, he's got the accent point one point two.
He goes, love your podcast. I look like I have a podcast. He holds up these headphones. He goes, me and my wife, we get high and then we record it.
I was like, okay. All right. And then he's like, that's just how we started. We had even said anything yet.
He's like, um, I'm like, so what do you work on? And he's like, I, he's like American food is shit. And I'm like, I think I agree, but okay. Where are you coming from with this?
And he's like, I, um, I'm a super smart guy. I sold my last company, decided I was like, I went back to Turkey where I'm from. And I ate a banana and I was like, this is what food is supposed to taste like. So he's like, I realize I can use AI to grow better crops.
Like I can literally grow better food. Uh, if I take everything in machine learning, he's like, I trained a dataset on all, like scientific papers, I scraped all the scientific papers from like the journals and I trained a GV on that. And I tried to figure out what can I do to get more minerals in the soil so that American food, which is like, it's the same food. It's a banana, but it tastes bad and it doesn't taste like as rich as it does in other places.
And it's like deficient in all these minerals. And so he's like, I'm going to, um, grow more mineral rich food. He's like, I have the best. He's like, you like dried berries?
I was like, kind of love dry berries to be honest with you. And he's like, I'm going to send you dried berries right now. He's like, these are the best berries you ever had. And he's like, one serving of this is 60% of your daily vitamin C intake.
And I have like, we buy whole foods, whatever you go. Look at that. It'll be like 5%. Like it's like nothing.
He's like, no, no, this is 60%. And he's like, uh, we grow it without soil. And I'm like, I don't even understand what that means. But okay.
He says to these berries, my kids are obsessed with them. They taste so goddamn good. And I'm like, you know, getting all these minerals. So I'm like, this guy actually might not be full of shit.
Um, then he's like, I'm like, okay, what's that? Like the main thing is that he's like, but I also love to get back. He's like, I immigrated here. It really changed my life.
He's like, so I'm going to bring 10,000 Turkish engineers to America, engineers and lawyers. And I was like, what? He's like, yeah, my business plan is I'm going to bring 10,000 engineers and 10,000 lawyers to America from Turkey. And for those people in Turkey, it's going to change their life.
And for America, you're going to get high, you know, super smart talent that's going to come here and work. Um, and I was like, how, why is that? You're going, how do you even do that? And he's like, basically had figured out an entire, like, by the book way to get people visas systematically and programmatically.
Um, and he's like, and he created a model where he's like, basically, he, he brings you over and you have an eight little income share. So you're going to start making a hundred K plus a year, um, as a lawyer or, uh, or an engineer, he takes the income share of that. He invested in bringing the next engineer over. He's like, I basically have to fund 10 of these guys.
If I fund 10, I can get to 10,000. And I was like, this guy is thinking on a totally different wavelength. The way he worked out this, this plan, I thought was great. His overall energy was great.
And he was not just working differently than much of her thinking. It was works on different things than anybody I know. Like, I don't know anyone that should grow, like, mineral rich berries and bring 10,000 people immigrants into the country. Like that's what this guy's game plan was.
By the way, I got to share you share with you guys a funny conversation. I had, I shared it with Sean and I'll read it here. But basically, uh, I didn't want to bring this guy up because I talked about him so much and I get made fun of, but I invested in this guy, this guy's company named Brett Attock. He's like my, my, I have a man crush on him and he's got this robot company.
He sent me a picture of like the robots and how they're like moving. It's amazing. And I was like, wow, that's amazing. You've done all this stuff in 18 months and you've not raised a lot of money.
Is this like a business that you can like not raise a lot of money for? And you can own a lot of it. And his response is a perfect example of why crazy people exist and how I'm just absolutely not one of them. He says, well, this is verbatim.
Well, it's going to cost a little under a trillion dollars to ship 10 billion robots. So I don't think it'll work without raising. And I was like, yeah, fuck me, right? Like, what do I know?
I'm going to go tweet. I'll be our PRB. I'm going to go to the guys going to the air robots and you ask them the equivalent of like, Hey, if you thought about doing a newsletter about it instead. Like, you just bootstrap this and not raising money.
I need to tell you about it. I felt like it's like a little bitch when he said that. I was like, yeah, yeah, you're right. All right.
What about best and worst investments for the year? Yeah, this is my favorite category. Andrew, you've had the best stories in this. I think you have the most probably most prolific investor that comes on this pod.
So can you give us your worst, give us your best and worst. So, yeah, my best was I was in New Zealand. I've been working on getting my New Zealand citizenship for the last two years or so. So we had this.
Yeah, yeah, they have this. There's this as part of the program, there's this mandatory conference. That I had to go to and I was absolutely dreading it. I had been traveling a whole bunch, but I got go.
I had to go and I was thinking about it and going, OK, well, who do I know in Auckland, New Zealand? And I realized I'd met this guy, Matt Buchanan, about 10 years ago, at Southwest, he ran a design agency at the time and he had started this website called Letterbox. You guys know what Letterbox is? Yeah.
That's like a movie thing. What is it? So social network for film buffs and it started out really, really small. It was just like, you know, hundreds of people at first just discussing films.
And then over time, and especially over COVID had grown like crazy. And so Matt, my met up for coffee. And I just asked him about, you know, how everything was going. I wasn't at all thinking about investing or buying it.
And he started telling me that they had 10 million registered users that had grown like crazy. And at the end of the coffee, I literally just blurted out, do you want to sell? And he was like, well, I hadn't really even thought about that. And I was like, throw me the craziest number you can think of.
And so he threw the number out and I said, OK, and I sent him an offer within 48 hours. And we just bought that business. We didn't buy all that we bought. I think 60% of it about three months ago.
Did you buy it for the number he said? Yeah, the valuation, I think it worked out to about $60 million valuation, something like that. And there's the three guys. Yeah, no, it was about 10 or some employees all in New Zealand.
So totally bootstrapped New Zealand based designer and developer started it like incredible business. They're going to keep running it. But it's an example of, you know, we bought a business called Dribble about eight years ago, which is a social network and social networks are just incredible businesses. I call them like airports.
You know, if you own the airport, you can put it. You've got this group of people that's going to congregate there on a consistent schedule. And you can sell them, you know, all sorts of stuff. You can sell them a book.
You can sell them a hot dog. You can sell them a massage. And as long as you don't mess with them and you keep the community happy, you know, you can do some incredible stuff. So I'm super excited about that.
This is your in for for Zuck. You can go back to Zuck. Hey, Mark. I told you a good idea.
Social network owner. You got one I got to, but who's counting happy to meet? I felt like I got my in. Yeah, you guys can start your own little Facebook group of social media.
Yeah, social media owners. And your best one last year was Girl Boss. Your worst one last year of its venture capital in general, which are worst one this year. So my worst one this year, it was an investment I made about five years ago.
And it's a great example of shiny objects, syndrome, lack of focus and what I call a money bonfire. So I bought a podcast player called Castro about five years ago. And at the time I was really hopped up about podcasts and subscription podcasting. And it was around the time I started coming on MFM actually.
And I bought the business because I was excited about the space, not because I had a plan. And so the business basically just languished the founders left. I couldn't find anyone, you know, they couldn't find the right person to run it. And just every month, you know, I think I bought it for a million bucks and it just lost 10 to 20 K a month.
And it was a small enough number that blended into all my other stuff. I just didn't really notice it. It wasn't like an urgent thing. And so this tiny little ember turned into a money bonfire.
And so I think I lost $2 million or something over the last five years on this business. And now I'm in the process of selling it. But anyone want it? You too.
Like a money bonfire. Maybe someone who wants to get into podcasting. But anyway, it is it is one of those things where I've done this so many times where I start something and it's a runaway train and I just don't get the right people in and it just slowly burns money. Dude, unless you're like a human or, you know, host like us, I think podcasting could be good.
I think podcasting is like venture capital companies, mostly is shit. It's a very hard business, I think, to build tools for it. We get pitched all the time on like people are trying to make podcasts more discoverable or this or that. It's a hard business.
That's a hard industry. Yeah. A hundred percent. Same what you got best and worst investment of the year.
All right. I don't remember what I say last year for best, you know, say. So tell me that a second. But all right, my best investment man.
One weekend I was talking to my wife. I was like, Hey, we're gonna have kids one day. Do you want to keep working or what do you want to do? And she was going to tell me and I was like, Well, I'll tell you what to make her decision a little bit easier.
I've got this idea for a little copywriting thing. I'm just going to put it together because it's fun. And it's how I taught my team how to write and it's how I learned how to write. I'm just going to do this for fun.
And if it works, maybe one day you'll want to quit your job and run this. Turns out she doesn't want to, but I made it anyway. Yeah. So I run this.
Yeah. So I made this thing called copy that.com. I just did it for fun. I did over the weekend and that one little thing that I made, it pays for my living expenses.
I don't really do much for it. I don't do anything for it. And it pays for my living expenses. And for some reason, like some of my other things, like this podcast or Hampton, like when things get a little bit bigger, you can't really deviate or move quickly.
And I just use this and also I have partners. So I've got like Sean, my partner in this podcast and then with Hampton, I have a business partner and I've got customers and things like that. I can't really do what I want all the time, just like on a whim. And so I use this as like a little bit of a playground to do whatever the hell I want.
And it's been fun. And so I really enjoyed it. My worst investment. So so far, Sean, I've invested about a million dollars into companies via angel investing.
I have seen not $1 back since I started doing it in 2016. I've got a lot of markups that $1 million is maybe worth $5 million on paper, but paper don't pay my mortgage at least not this type of paper. And it's pissing me off because I knew what it was going into it. And I just don't like having to have the patience or not having any involvement.
And so that's probably been my worst. So far, I don't think it's going to be worse in terms of ROI, but I think it's worse in terms of I just don't enjoy it. You know, what's interesting is I've got a friend. He's an angel investor and he sold his company like you.
And he said, I've always wanted to be an angel investor. And so he invested in five companies and two of them paid him back 10 X within two years. And so he learned the wrong lesson, right? Because that's not most people's experience.
Then he doubled down on angel investing for five years. Didn't see a single return for 10 years. And so I think it's like anything. If you try something the first time and it gives you a win, you love it.
Like I guarantee you, if you have already gotten two million dollars back, it's awesome. You'd be like, I love angel investing. It's the best, right? But what you've really done is you've gone into the casino and gamble, maybe with like a slight edge, but you're really gambling.
And I feel the exact same way. I have barely seen any money back. You've seen any money back, Andrew? Yeah, I have, but it took 12 years for the first one.
Was it significant? Yeah. So I put in 75 grand into a business and I got 800 grand back and then I put 250,000 into one and I got three million back. But I also over the next period invested in like 20 or $30 million in the venture.
So I canceled out all the other games and it all comes down to like when you're investing, the year you're investing. If you invest in 2020 and 2021, like it's just everything's out the window. Yeah. Well, we'll see.
Sean, have you seen any money back? You're starting my rolling fund. It was just ironic. Actually, the first batch of investments we did so far are the highest performers.
The first like six investments we did were the best batch, which is kind of interesting. Well, you pick a handful of winners. I know if you're that you've picked and you've got a couple really, really, really companies. You don't get liquidity until if it's a winner, it's going to run for 10 years.
Right. So it's not a good thing to do if you need cash today, which is like, yeah, I've got winners. I mean, it's going to be good. It's just boring, just lame.
Well, my best and worst investment. All right. So my best, I had a couple more interesting examples, but I'm just going to say the one that's actually the best of the truth. The answer is clearly hands down Shepherd.
So I had this idea, mostly inspired by you Andrew, which was, wow, this guy does really well and he doesn't have to start and invent the next big thing. So you buy businesses that already are working. And then maybe already have a tailwind. So they're going to just keep working at a greater rate in the future.
Like when you got to like the say the Shopify ecosystem with we commerce, I was like, oh, that makes sense to me by something that's already working. That has a tailwind and hopefully you can accelerate it or make it work better. But even if you don't, you can still make good money if you buy at the right price. And we got like a crazy result so far out of the Shepherd deal.
So I had this idea, which was, we'll be fine to product that I use that I like that I kind of believe in a business that's already working. Shepherd for the bill by in. We buy it in this case, a minority stake, not a majority stakes. So that Marshall would keep operating the thing and keep growing it.
The tailwinds were behind us. Basically first it was COVID. So people went remote. That was one big tailwind.
Second tailwind was where the economy started to slow down over the last year. Everybody started to realize they need to be profitable. Well, one way to be profitable is higher talent for five times less than you're currently hiring talent in the United States. And so higher offshore talent became like a very obvious thing for business owners to do if they wanted profits.
And so Shepherd just takes off and the third piece, which is can we accelerate it? And we had done a couple of experiments and like, look, we have this big audience, right? Between Twitter is almost half a million people. The podcast is way bigger than that newsletter.
We have a different, we have not just a big numbers, but like big trust has that has been built up. So we pick a product that we actually believe in. I think this will work. We did the last, I don't know, we've only owned our stake in the business for like six to nine months or something like that.
The business has tripled and it was already big to begin with. And so this is just like an incredible result. What, how much of that is because of you? Well, we could see it because when people sign up, they sign up and they sign up and they say where they found it from.
And so that's a minimum. Like there's some people who may have heard about it on podcast, but don't click the link or don't, whatever. And Nick does a great job too. So I don't want to like, you know, take away from that.
But like in the last six months, we drove like 50% more of the leads to business. It's like a pretty insane value driver. And so now I'm like, Oh, I'm an unfair advantage. If I don't need to do 10 of these, if I just find a couple of businesses that already stand alone, good as I believe in and I do the same thing, if I can add millions of dollars of A or R to this business, it basically can't lose.
That is a completely unfair advantage to have. And now all I have to do is choose wisely. And so that's what I've been doing. We only did one deal this year and we saw, you know, maybe 60 or so, but I think we picked the right one because that investment has paid off.
That business has added probably that one deal he did. Like I thought I was getting in a good price, but it is added at least $35 million of value just to that business, just based on the growth. And so that's like a crazy deal for him too. So, you know, good good on Marshall for cutting it.
It's interesting because like I think I assume that he did it as a secondary or something like that. He wanted to de-risk take money off table. Yeah. But effectively, it's like a primary sale because you've injected call it 10 or $20 million of free marketing as part of the partnership.
Right. Yeah. It's super smart. And it goes back to that idea.
I think I've talked about it on the pod, but one plus one equals 100. You can take a mediocre business. I think Shepherd's a great business. So better if it's a great business.
Well, that's not how that works. No, it's not. Right. But you can take something, you can take a product and combine it with an influencer and you can get an incredible outcome because you basically have a free $50 million marketing budget as a result.
Well, people had talked about this, but like, you know, when I think of influencer, I think of like King Kardashian or like, you know, Mr. B, he's like, yeah, obviously, you know, they promote a product. It's going to go really well. It turns out that there's a thing like be a influencer, right?
There's like a person who's respected amongst business people who is essentially like, you know, I'm not saying my ass is big, but like, we're kind of the concordative business influencers, right? You could promote to a community that that understands what you're doing. And if you get a good product with a good business, it will actually take off. If you have a shitty product or a shitty business, they'll try and then it'll leak out right away.
And so it doesn't really work. But literally, this is what HubSpot did HubSpot looked at the hustle and they said, well, right now they're making call it $20 million. I don't know if the number is $20 million of ad revenue, but how much are those advertisers making off that $20 million of ad spend? Maybe it's $30 million or $40 million or $50 million.
And so they can pay up to buy this business and then they can just direct the traffic to themselves and make all that money. And I've seen the numbers. I think it's a good. I think it works for them.
And let me tell you a crazy thing about this separate deal I haven't shared before. So the way we structured this deal was beautifully done. So I was like, look, the business is good. The business was already spitting off millions of dollars of profit.
So it's like, cool guys, I can bring you guys capital, but you kind of already have like a cash cow that's spitting off millions of dollars of profit. So like, I don't really want to, well, that's not really the value. Yeah, clearly the value is going to be that I can help grow this actual, grow the customer base, right? Because because of the audience.
And so essentially I put a very small amount of money down and then the company lent me the money to buy my stake in the company. That's insane. And I was like, what? And I was like, did they type this wrong?
They're going to give me the money to buy the business. Give me the money to buy the business. Like, all right, deals. Right.
This is easy. And it was a great deal for me. But again, like I said, the valuation of the company has grown over $30 million just in that period of time. And so it's less than a year.
So like, I thought, dude, I'm getting an absolute steal here. Turns out they got actually even the biggest deal that I got. It was like win, win. And so that's deal structure.
Because that's another thing I've learned when it comes to buying companies, like in venture, there's no structure. Venture is you put in money on a safe note or a price round. It's not even negotiating on really the terms unless you're the lead investor and you're doing something really funky. It's not standard at all.
When it comes to buying companies, structure is to make the difference between a good deal and incredible deal or a terrible deal. And structure really, really matters. I learned a ton about structure this year, negotiating a bunch of deals. So Shepherd kicked ass for you.
You did great. Let's move to the biggest L that you took this year. What was that one last year at the end of the year, this time last year? I was like, Hey, tax optimization.
Why don't I sell a bunch of my crypto for tax purposes? Because with crypto, you can watch trade, you can basically sell and buy back the next day. You can book the loss because crypto was down last year, let's say. So you can book a loss on any crypto that you had bought higher than that.
And so crypto was crashing crypto went down to like, I don't know, six Bitcoin went down like 16 K and I bought a bunch of Bitcoin at when we were doing the milk road probably closer to 30 K. So I could book a big loss and then I was like, great, I'm just gonna buy right back. I believe in crypto, right? But there is a funny psychological thing where, you know, catch a falling knife.
It's like, I could buy back in my like, should I buy back now? Is it gonna go lower? You know, should I just kind of wait this out and see how it goes? Maybe I'll just do this other thing that that thing's hot right now.
I'm going to do it. I'll do it. I'll do it at the end of the month. And I said, I'll do it at the end of the month for 10 months straight.
Just enough time for Bitcoin to rip back up another 35, 40% and I bought back in and, you know, it's my tax savings cost me a lot of money. So that was a big L when I took falling into a bunch of obvious psychological traps that I could have pointed out for anybody else that I fell into. Now, luckily for me, I didn't sell all of it because I bought much lower than that. So it wasn't like that part wouldn't have been a tax loss, but still dumb.
That's the second time you've done that that I know of by my course, sell low by high, right? Like that's basically what I executed to perfection this year. I have one more that was like a big mess. What is it?
So we talked about angel investing and angel investing. We're talking about like getting returns. Everyone's a game of investing is you're going to invest in 30, maybe 50 companies and it's going to be one or two that are like a runaway winners. That's really what you're playing the game for.
It's like you're not trying to have a high hit rate. You're trying to have a huge slugging percentage. So a few just absolute grand slams and I missed two. Two is a lot.
Two is the number you need to win. And I missed two. The first is a the realization here was it's not. It's not about bad investments you make.
It's the ones you miss. It's about the incredible events, investments you miss. And that's how it goes. So I got introduced to a company called whatnot that I don't know if you guys have heard about this business.
We talked about it on the pod. You were early talking about it. It's like eBay. I talked about it.
I believed in it. I was like, dude, I was at Twitch. It's basically live video streaming and it started with baseball cards and then in a sports card. So basically people would open up a pack live, but you would buy the pack.
So it's like live. They're sitting there. They got all these packs on the table. You would buy one.
He would open it up and he would be like, you got to look at Don just rookie card. Wow. This is amazing. And the chance went wild.
It just keep buying packs. And so it's like this like kind of live video sort of like casino. I like all those words live video and casinos. I was like, I want to invest.
And the guy's like, I don't know, man, we're like pretty oversubscribed. I'm like, but it's me. So pal Sean, we just met, please. And he was like, let me think about it.
And I didn't. He was like, I don't think so. I don't think I'm safe. Let me go talk to people, see if I can make space.
And I made a big mistake. I waited and I didn't chase. And whatnot is now valued. I think it's $10 billion.
So that would have been by far the best investment in all of my angel investing. I was there early on and I believed it. And I wanted to invest and I just did not fight hard enough to find a way to get into that company. And so, you know, it's an angel investing.
It's not about, oh, I made this one bad investment and I lost one X. It's that I missed out on, you know, a 200 X or 500 X return on that one deal, right? Like that mind, 150k check that I wanted to get into that would have been like a $30 million position at this point. So one question was it when was it valued at 10 billion?
I think it is it might have been at the kind of peak time. July 2022, they raised that 3.7. Yeah. So maybe it's a four billion now instead of 10.
So anyways, you know, basically that would have been a multi billion dollar. It's a multi billion dollar company now, which is all you're trying to do investing. Same thing happened with a company called shuffle. So my former intern who came on the pod, he did an episode.
I was like, my old intern became a millionaire. Um, when we were hanging out doing the pot, I was like, so what are you doing now? And he's like, Oh, I'm doing this again, this crypto casino overseas. And I was like, I like all those words when it comes to making money.
I wouldn't want to take the risk myself of running that company. But if you're going to run like, I think it's a great investment. Cause these things, you know, we talked about state.com. That is just this absolute juggernaut.
Stake is, you know, issuing like billion dollar dividends a year. They have so much cash flow and these guys are building like a stake competitor. And I want to do a vest and then our lawyer and back office was like, yeah, but they're based out of this country. So they're not going to provide the K ones in time, blah, blah.
And I was in a fund and I was like, I can't put my fund money into this. Cause again, it's like this overseas crypto casino thing and the fund cost me. This thing is going to be a total winner. Uh, it looks like their, their volume is growing like crazy.
I think they have like, I don't know. He, I'll look up the latest numbers. I mean, it's just painful. Every time he tells me the latest numbers where it's like every day is their biggest day.
And, uh, you know, they're doing millions of millions of dollars of daily betting volume and they're profitable. And I'm like, you know what's interesting is like, you might feel like you've missed the boat on that. But one of the things I learned is like, think about Amazon.com, right? Amazon.com launched in what?
1994. And you, you know, you basically add until 2012 to buy the stock, right? Now, obviously it's publicly traded stock easier to get into, but I bet you could go to him and say, Hey, remember your old pal, Sean, can I put a hundred grand in or whatever it is? And just suck it up, right?
Don't get caught up in the fact that you could have invested at some low valuation. That sounds like it'll be a winner long term, right? Yeah. I mean, who knows that's a super high variance bet.
Like they get shut down tomorrow. If like wherever they're based in some little islands, somewhere gets like, you know, sees, you know, who knows what's going to happen with that. But that's a roller coaster I wanted to be on. If you're going to do angel investing, you need high variance bets that can become absolutely massive or go to zero.
You don't want things that are low risk, low rewards. That's not how angel doesn't work. Anyway, so those are my two words of essence. They're missed, missed out, not lost money.
What's your danger? So, um, I'm a designer, like, um, you know, I like things to look nice. And I think every designer has this dream of building their dream house. And so, uh, about seven years ago, I bought a piece of property and I started building an amazing house and I hired amazing architects and interior designers.
And I'll just say now, if you think you want to build a house, try it. It really sucks. Uh, you know, everyone has this fantasy. But what it really is, you know, you think it's going to be about approving, like, beautiful, mysterious, what it really comes down to is you are choosing where the electrical outlets go.
You are proving what, you know, what color tone all the lights are. And so you make 10,000 decisions and eventually you get decision fatigue and you start making bad decisions or if you delegate, you delegate someone else. And someone else is just, you know, they, delegation is great in a company. But when you live in this space, the things bother you.
And so what I found was, I, because I was building my forever home, I would approve, they'd be like, okay, do you want this marble or there's this really, really, really nice marble that you can get where it's got, you know, nicer designs or whatever. And I'd always choose the more expensive option because I was thinking, this is my dream home. I only get to build it once. And so I massively overbuilt, I massively overspent.
I ended up not being happy with the actual house once I was done. Wasn't the house like 8,000 square feet. It's huge. I had everything I could have wanted a gym.
I had a movie theater, all sorts of stuff. And I ended up not even liking the house when I moved in because I just walk around the house going, God damn it. I remember making that decision. You know, why did I make that beam that height?
Why did I put that light there? And anyway, so I ended up getting divorced a year and a half ago and neither me or my ex wife wanted the house. And so I had to sell it. And I took a 30% loss on this house that I'd spent, you know, five years building and spent tons of money on.
So that was my, that was my big loss. And my big lesson is I remember my dad said, you always want to be the second owner of a hotel, right? You want someone else to go crazy and build it out and then go bankrupt. And then you want to come in and own that.
I think the same thing is true with houses. Just go buy a nice house that someone else built with a great line. You had an even bigger one though, written down here. Yeah.
The other thing that happened to me this year, so this is, this has happened to everybody, but no one feels it. So this year, my network got caught in half on paper, right? So I went from my, let's just say what publicly available. So my tiny stock was worth like $750, $800 billion.
And today it's worth about half of that. And it's really fascinating. Like when you're, when you own a private business or you own a real estate portfolio, you don't have a ticker, right? If you own a million dollar house and all the houses in your neighborhood go down by 20%, you don't see that.
You're not reminded of that. And one of the crazy things about having a stock, a stock ticker is every day you can see your net worth go up and down in radical ways. And so yeah, that kind of was pretty, a pretty insane experience to see that happening over the course of six months. I would never text you this, but I remember like seeing the stock and everyone's want to be like, not, I just want to be like, what does that feel like?
You know what I mean? Like, because there's been days when it's gone way up and there's been days that's gone way down. And I'm always curious. I'm like, she knows what's going on.
I'm going to stay out of his hair on this one. It's really weird. I mean, Warren Buffett has this great anecdote where metaphor race says owning a business is like owning a farm. Let's say that your farm makes a million dollars a year of profit and some, some yokel comes to your fence and he starts yelling, I'll buy your farm for 100 grand.
If you know your farm is worth millions of dollars, you just ignore the yokel. And so there's all sorts of different people shouting different offers on your farm at all times. And so that's kind of the approach I try and take is I just go like, you know, I know my business, I know what it's worth. But yeah, it's pretty weird seeing big swings like that.
My worst thing this year was my biggest L was partially inspired by Andrew Andrew. You make a huge mistake when you're talking to me. The mistake is you say, Oh, it's just easy. You just hire a CEO and then and you miss out on two things.
One, it ain't easy. There's always harder than you think. There's always more challenges than you think. The other thing is managing them, you know, how should they manage you?
How should you manage them? The thing with my company, my CEO Jordan, he's awesome. But it's heavily based on my reputation and I'm heavily involved in the product. And so when I want to be involved in the product, I've made mistakes where I'll just go directly to certain staff versus like understanding the chain of command.
And so just like understanding like how to like work with the CEO effectively has been a little bit of a challenge with me. I it's going great and things are going good and I've made a lot of really good decisions and he's wonderful. But just learning how to like understand that relationship has been a challenge. And I've gotten in trouble a few times partially.
I take blame for a lot of the instances, but I wish we would have talked more about how to manage them tactically. We've talked a lot about how to hire and fire and things like that, but not how to like work with someone on a daily or weekly or monthly basis. Yeah. And I lots of learning there because I think it's very tempting to see a mistake and jump in, but it's similar to delegation, right?
When you first start delegating to an employee, you want to correct the errors as you see them. But at the end of the day, the hardest part about having a CEO is that they can ruin the business if they're not careful and you ultimately have to let them make their own mistakes and learn from them. I think I've shared on the pod. Like we've had a couple instances where a CEO wants to spend one, two, three million dollars on R&D and we don't believe it's going to work out, but we let them because we go, if we don't, they're going to resent us.
They're going to say, Andrew and Chris, we're holding us back. We couldn't make our bonuses because we couldn't execute on the strategy. And so we always say, um, we want non fatal errors, not fatal errors. We'll intervene when they're fatal, right?
So I think for you, like intervening when it's something that's going to ruin your reputation, you should jump on that or ruin the business or imperil it. But otherwise the hard part is you just kind of have to watch them, make mistakes and realize that over the long term, they'll make more, um, make more good decisions than bad. Yeah. And it's just an emotional, these are emotional issues, but, um, that's mine.
Sean, what do you want to do now? Which one? Let's go to one of my favorites. So unsexy business.
So what is a unsexy kind of under the radar, maybe simple business, uh, that stood out to you that you really liked. Let me go first on this one. I've got one that's interesting. So there's this guy with the high school with him, Chris, Chris Hoffman.
He just started posting content on Twitter like three months ago. So basically he posted a story, but I've known what his father did. So his father owned a heating and cooling company called Hoffman Bros, heating and cooling out of St. Louis, around from he posted, he goes, in 2016, we took over my father's company.
Um, I bought it from him and it was doing 13 million revenue and he goes to 2016, all the way up to 2013 where he explains the changes they made and how much revenue, uh, the business is now doing. So 2016, it was 13, 2020, it was 40, 20, 23. It's going to be like 140 million revenue from HVAC business that he owns. And he's, and he like tweets out all these interesting bits of content about things he's doing.
Like for example, we're giving an additional holiday off and here's how I think that that's going to impact the business or we created this thing called Hoffman University, which teaches people we had to buy a whole building for this much money. It's been very, very fascinating. Heating and cooling companies, that's going to be the new storage business. We're going to see lots of people going on and doing that because of this guy, Chris Hoffman, really fascinating stuff.
Yeah. So mine is really, really boring. So, uh, in every fashion house or graphic design studio, there's a book of colors called Pantone. So you might see these, these big fat books and you can literally just flip through them.
You look at different colors and what they've done that's incredibly smart is they've trademarked colors. So they have intellectual property where it'll be like burgundy blue, sapphire, orange, you know, whatever. And this company I found out makes over $100 million a year of revenue. And one of the most genius things about it is they give you that book and they say, you need to buy a new book every year because the colors fade, right?
From being in the center of whatever. And so they're just constantly reselling these books. People are licensing these colors and the entire fashion and graphic design world is standardized on Pantone. So it's, it's just so boring and wonderful.
Well, we talked about WGS and their competitor and how I think it's publicly traded, but they're trying to sell it for like, I think they're trying to sell it for like $800 million because I don't think they're competitors. This is like the lower level. This is literally the colors. It's not saying which, WGS stands like we're going to research and reports.
Which color is like Pantone does that too. They do like, I'll do like color forecasting and trending and all that kind of stuff too. Where do they make the money? Is it on the books?
Is it on the guys or is it on the reports? I think all of it. And then if they use the color, so they'll say like this color of red is going to be in next season or whatever. And if you want to use it, we have some IP around.