When everything works, you learn the wrong lessons

All right, look, on YouTube, everybody talks about how they're crushing it. Every business podcast, every business influencer is talking about how great everything is going. But on today's podcast, my buddy Nick is coming on and he's doing the opposite. He's talking about a bunch of the big mistakes he's made.

He's eating humble pie publicly on the podcast today and talking about some of the things he's learned from it. So I want you to tune into the steps. I was talking about how he made the biggest acquisition of his life when he bought summer.com, how he might have screwed up certain things and how he's trying to recover from those. It's another side to Nick.

If you don't, Nick, he's a popular guy online, but you don't always get to see the humble side. And so I think it's a great episode with Nick. Enjoy. All right.

What's up? We got Nick Huber here, friend of the pod. Nick, what's up, man? John, thanks for having me.

Been a long time. Did you, you've wrote something. So we have every guest do a little prep doc. Like, Hey, what are some things on your mind, stories, ideas that you want to share?

And you wrote one that I think is very interesting to people who've been following Nick Huber. So you built up this personality online of being confident, borderline cocky. You know, you have strong opinions. You are not afraid to piss some people off.

And you said this in the document, you said I've been humbled off my cocky attitude in my thirties. Is this a, do we have a heel? What's the face turn like in wrestling where the bad guy becomes good? What's going on?

Yeah, man. I think the last five years in business, I mean, five years ago, you guys had me on the pod. I felt like I knew everything. And like, I think it was that irrational confidence early in my career that I wouldn't trade for anything because I think it led to a lot of success.

I mean, putting myself out there. But yeah, man, like you just realize that business is hard. Business is really hard. So it's not the same as it was 2024, it's not the same as 2022, 2023 for any entrepreneur I know.

So give me an example of how Nick, what Nick was thinking then versus Nick thinking now, because there's this great phrase, everyone's a genius in a bull market. I think part of what you're going to talk about is like back in 2020, 2021, 2019, like during that era, it felt like you could do no wrong. But like, give me a nick back then, he was thinking XYZ about himself or the world. And now what is Nick thinking?

I thought business was easy. I thought building executive teams was easy. I thought customers just came. I thought I could do no wrong because I had this personal brand started all these companies, 30, 10 plus companies over a three year period.

My mind is that four of them have been shut down. So yeah, it's not all roses. It's not all roses. But you are, you know, I guess older and wiser now and you've, it's sure something shut down, but other things you've sort of doubled down on and it started to work.

What do you think caused that? Was it just market kicking your ass a little bit in certain areas that sort of made you be assessed? Were you wrong about a specific thing? I thought with a personal brand that's strong enough, you could get it in agency business of any kind and go to the moon, whether or not you do a couple things right, couple things wrong, whatever.

And then yeah, the algorithm changed, like business got a little harder. People started really watching how they're spending money. So I just think it's harder now that it was man. Like I know a lot of people who are making less money now than they were three years ago.

Right. Right. Okay. I want to jump around into some of your new ideas, so things you're feeling, thinking right now.

So you know, you mentioned being sort of humbled. You mentioned your portfolio going from how many companies did you have kind of like at your peak and how many do you have now? Yeah, I started 11 companies from, you know, 2016 was my first. You know, like I'm going to do an SEO company.

I got a storage company. I got a bunch of other paper, paper, click marketing company called Adriana, a sales consulting company called Huber method at a business brokerage. I had, you know, on and on and on. So I went on his face, where I was like, I can't, I got the hot hand.

My audience is super powerful. Like let's scale up some companies. Do you remember at your peak with a group revenue or of the companies you owned majority of a group revenue or cash flow was at the peak? Because it was working for a little while, right?

Yeah. Well, group cash flow right now is actually way higher than it was, but it's only because of like a three headed monster of the companies that rose at the top. So it's kind of like a power law thing, right? But of the six bottom ones, I mean, we were up to half a million dollars a month.

Maybe a total revenue. Yeah. Shut down for and two of them are, you know, treading water right now. Right.

And so I think the most interesting lesson, because I've got to see it from the inside, I don't know how much of this you've shared, but we were both partners in a company called Summer actually at the time, it was called Shepherd. And people don't know the backstory here. So the backstory is Marshall, who's the founder of the company owned the majority of the company that me and Nick both had a good chunk, but in the minority. And Marshall calls and he says, Hey, I got an acquisition offer.

I think I'm going to take it. And I was like, Oh, wow, talk me through it. What is it? And he tells us that Andrew Wilkinson, our buddy, other friend of the pod, he made an offer by the company for $52 million.

And this was great. You know, this is a company that Marshall bootstrapped and raised any money. So, you know, potentially big guys, but it was a stock based deal. And you know, Marshall was going to take it.

Marshall had worked for Andrew when he was young. He had a lot of respect for Andrew. So I think it was like part of it was like this, like almost like full circle validation moment, but personally, I think every entrepreneur could have that. Where it's like, wow, Facebook wants to buy my company.

It's unbelievable. And then there's the financial component to it. And on the phone, I was like, well, let me give you my opinion. And I really, very quickly, I was like, Oh, he's actually already decided.

This was a, let me, I just wanted to let you know disguised as a, what do you think? Call, but you know, I'm, I'm a very opinionated guy. So not to be deterred. I was like, Hey, listen, like, you know, we're growing really fast.

I like our stock. Why would we trade our stock for other versus stocks? Like we should just keep our stock. It's growing.

It's a small company. So by nature, it's going to grow much faster than these larger companies. And, you know, that's not going to be that liquid. Are you sure this is the only one?

Then I called Nick and I'm like, Nick, what do you think? I had this opinion. You were very similar. And we had this idea of like, if he's going to do, if he wants to sell, maybe we could buy it.

And originally that was some of the idea and I said, Oh, look, my life will get too crazy and complicated. I don't want to do this. But you were like, I'm going to do it. And so walk, that's where that's where the story begins.

Walk me through what happened. First of all, was that your same history? Did I mess anything up there? And then, yeah, the 47, 47 million dollar valuation, the company was three years old and growing really fast, 150 employees.

And I was a customer and became an investor and had started to build world by teams. But yeah, here we are. Marshall calls me, Hey, Andrew, Andrew wants to make an offer to buy the company. I realized, Hey, I don't want to sell anything.

I want more of this business. And this was peak. This was also just peak Nick Huber, you know, not humble Nick Huber of thinking I can do anything and I can't go wrong. And by the way, we had just tripled the business that year.

So it wasn't like it wasn't like we were having a reason to not have confidence. Like the business had just tripled in cash flow and so like that was good. Yeah. Hey, I got some pretty cool to share with you guys.

So if you're like me, you listen to podcasts or YouTube videos, you like to take notes, you're here to learn. And that's a lot of effort. Sometimes you're on the go and you can't do it. And so the folks at HubSpot who are sponsoring the podcast have done something pretty cool for you.

They have created the MFM vault. It's a place to go find notes and resources that they pull from the different episodes that we do. So if we have a guest on that shares their five point framework, they write down those five points with the examples that the guest gave and they put the notes there for you. So if you want to access the vault, it's totally free.

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Okay, carry on. So you decide, I'm going to, I tell you, Hey, I think I'm probably not going to do it, but you're like, I'm going to do this anyways. Yeah, I say, you know, Marshall, actually, I want to be the one to buy your company. You shouldn't sell to Andrew.

You should sell to me. And his initial reaction is like you and what money? He had a lot of questions in his jaw. Most of the floor is like Nick, this is insane.

Like you kidding me? Like this is life changing money. You sell 51, it was a 51% deal because he still needed to remember. He still needed me and you in because we're sitting on business and he still want Marshall to have some skin in the game.

And yeah, man, the next three month period, I sold Marshall on the fact that I could raise 20 million bucks and negotiate a seller note for Chunk of it had to get very creative with how I structured this deal because I realized real quick that not the same as real estate and how much skin I can get in the game. So let's talk to this because a lot of people will give high level numbers, valuation, sale price, but terms is where like anybody who's done deals, knows like structure and terms matter a ton. Yeah. And how a deal gets done, but I'll stock deal, I'll cash deal up front, earn out, contingency based seller finance that, you know, it's a big, there's a big array of different ways that you'll go down.

So can you just give us the simple version of like, what was it originally? $47 million offer from Andrew, but the business kept growing over the next six months that we kind of got this deal done. It became a $52 million purchase acquisition price. And let me be clear that Andrew, it was early on, it kind of felt like me and Andrew negotiating against each other.

Holy shit, I'm negotiating against the Titan. This guy's bought 40 companies. You bought two publicly traded business, you know, a billionaire on paper for a while. I'm a great friend of ours.

And then Andrew kind of just thought about some AI risk. He saw maybe some headwinds and he said, you know, Nick, like maybe we'll do this together. It was kind of a conversation throughout. It wasn't as if we were have any animosity between each other.

Um, but yeah, it was, I was going to raise $20 million to buy 40% of about 40% company from Marshall. I realized that if I go out and raise $20 million to buy this company, I'm only entitled to a 20% carry on top once everybody gets their money back. Right. So the structure is you go to investors, investors give you 20 million.

Your deal with them is I get a 20% carry a profit share of that. So like, you know, you're only owning, so the 20 million buys you what? What percent? So we're going to hold numbers 39.25 for like 20 and change, but let's say $40, $20 million, I would need to get them all made whole, their money back plus a hurdle to then get an 8% upside, which is 20% of 40 million.

So my ownership stock would go from about 12% to about 20%. I'd have to raise 20 million bucks. I'd put my name on the line. I'd take all this risk, do all this work very quickly.

I realized like, I can't do this deal like it before it's for me to do this. So I went back to Marshall and said, Hey, I need to buy more of the company. And this is where we kind of got creative and I carved out an 18% seller note directly from Marshall to me. And a seller note is basically the seller saying, I will lend you essentially the money to pay me and you're going to pay me every year or every quarter, whatever you guys decided this.

So what was that? That was 18. What did you say? How much?

About nine million bucks for 18% of the company. So you all in, you raise 20 million from investors. You get nine million, nine point something million for Marshall. So you're in $29 million.

And now you're in charge and you've got peak energy. And I'm talking to you and we both are like, dude, we've had so many ideas of how we could share this business from X to Y. This is going to be great. And then what happens?

Three things changed drastically. Number one, we changed the name from support Shepherd. I'd set over too many people's shoulders watching them spell Shepherd incorrectly. Smart people to know that Holy cow, we cannot grow a big company with this name.

So we bought somewhere.com for $400,000 shortly after closing. Change the name from support shepherd.com to somewhere.com. Our SEO, our search engine optimization and our brand recognition vanished overnight. And that one fell swoop.

We lost 300 leads a month of about a thousand leads that we had. So you lose a third of your traffic on your brilliant name change cake next. Yeah, let me look at my notes. So number two, Elon bought Twitter.

Elon bought Twitter and started drastically messing with the algorithm quickly. And it went from me being able to tweet about hiring somebody in the Philippines for $5 an hour and send, you know, 3000 website visits and 200, 300, 400 leads to the company to virtually nothing. Right. So my ability to send business to the company with my personal brand.

Finished. Okay. The third thing is, I wasn't the only one to think international hiring was a beautiful business and many, many competitors started over the next six months, two years. Yeah.

So you guys are pretty loud about the acquisition, which also invites competition. Right. You're right. Tell me over the years, by the way, I try telling you this, but like, you know, everybody wanted to pound their chest.

Natural honestly, like it is actually upside to it. Right. I think the month we announced that to be fair, the month, the two months after we announced that position, it was actually peak growth because a lot of people went and checked it out and realized like, wow, there's a reason why all these people use the service is a reason why there's a high repeat rate of this service is probably pretty good. So it did initially cause a burst, but it also created, you know, it emboldened the existing competitors to go harder and it created, you know, 10 new competitors, let's say.

Yep. And in the economy, sort of shift, like interest rates went up. A general like silent recession happened in a lot of different industries. Right.

And our customer base, our customer base was not super well funded AI companies or something like that, where, you know, spending was, they're just spending, you know, sloshing money around. Like we help real businesses. So it'd be, whether it's, you know, small business, agency owners who own a hundred percent of the business and the cash flow matters to them. It's e-commerce businesses where you're already on tight margins.

And that's why you leverage global talent because it improves your margins, but you might just stop hiring altogether. Right. Like you might just actually shrink your workforce. tariffs are coming.

We would serve tech companies that were, you know, more responsible with their cash. And so like all these business owners that are great customers to have and a big part of our audience, they are obviously cost sensitive because they live in the real world. They're not VC subsidized with, you know, 50 million dollar rounds where you can just aggressively go higher and spend against macroeconomic headwinds. Yeah.

Ecom, ecom headwinds, home service headwinds, construction headwinds, real estate headwinds means lots of people are hiring, lots of people are growing their teams. Right. And I made a lot of bold, quick executive changes inside of somewhere when I acquired it. The company had grown very quickly.

It was doing 95% of its hiring in the Philippines, executive assistance. Right. We started to invest in Latin America. We started investing in South Africa, finance, talent, Egypt, building executive teams in South Africa, performance marketers, high skilled, you know, actually how to structure and build a company from the ground up internationally.

It's important. I'm making fun of some of the fun decisions because there is a happy ending. It all works out where they're coming back, growing well, all that good stuff. So then it's fun to laugh about mistakes.

It's not so fun when if things go poorly, you don't laugh about mistakes as much. You cry about them. Yeah. We're making it sound like we're going to do this in bankrupt.

But no, no, I guess that spoiler here, give the spoiler. The more kind of thing. You know, over the last four months, if you compare it to before acquisition, those four months, I was negotiating to deal with up about 60% from revenue perspective. And over the last year, it's 28%.

So I'm still behind my pro form of what I hope to do with the company when I bought it, but revenue is growing very healthily and our team is awesome. So I think we're doing a phenomenal job of finding people over the world. I've learned a ton about world, I want to get some people some tips to how to do this themselves, like what's it look for? But yeah, it's been a lot of changes.

So the reason I wanted to share this is because 99% of people talking about their experiences buying and running businesses, the selection effect is the people who are failing, shut up and the people who are succeeding get real loud. And I think what's cool about you is that you, you can give it and you can take it. And so like you are, you are bold and you say what you mean, you say what you're field, you're not afraid to be wrong. And if you're wrong, you say I was wrong.

And I really love that about your really respect, that about you. I think that's actually quite rare. And in this case, like you're basically saying, Hey, I went and did this deal. And then like here's a bunch of things that immediately I did wrong or went wrong for me and I had to like, you know, figure out how to do better.

And I think that's actually like quite admirable. The second part of it is there was there's something that in sports, they call a new owner, a new owner syndrome, which is anytime a sports owner buys a team, they immediately start changing everything. And they're like, Oh, I can do no wrong. I know how to fix this.

I'm going to do all these great things in your one. And one of the things that I think is actually pretty interesting here is even though we run this global talent company and we were finding town all over the globe, we were mostly finding kind of junior and mid level talent. So like, you know, whether it's assistants, executive assistants, it's like a big, you know, huge part of our business sales folks, you know, whatever, there's folks like that. But C sweet folks, we would typically assume are, well, that's who I want to use, you know, different local hires, either, you know, in the same offices, me or just American hires expensive big pay packages, you know, got a lot of pedigree with companies, I recognize, you know, whatever.

And so we did that, you know, we hired a bunch of executives. And that was, I think, made total sense on paper. And I think one of the cool things that you figured out that I didn't see going into this was since then you have actually rebuilt, not just the junior middle, but actually the executive team with executive talent elsewhere. And I kind of took that and I was like, oh, I should do that in my business.

Because that's actually like an even bigger hat because you were like, dude, I'm finding here's this person in South Africa. They've got an MBA. It was the perfect English. They've worked for international companies and American companies that do work internationally for, you know, 12 years.

They've been a financial control controlling these budgets. And you can hire that person at this price. That's incredible. You know, you're saving, you know, huge amounts of money on really great talent and really hungry, low maintenance, hardworking, hardworking talent all around the globe.

And so that was, I thought, one of the bigger surprises to me and like things we got wrong that we kind of corrected. And I don't know if you want to say a quick thing about that. Yeah, I have six Americans that somewhere out of 160 employees already cost a second another company, my portfolio is drawing only 130 employees, seven Americans, both storage, six Americans out of 60 employees. And they're all in sales and account management, because I just can't replicate the Americans ability to close deals, high ticket deals.

Now we're close with a couple of South Africans, but a COO at Ari Costeig, Johannesburg, South Africa, head of performance marketing in Bogota, Columbia. You know, head of finance and IT consultant who got me through Stock 2 compliance, we got a certificate this week in Cape Town, South Africa. So I used to think like, OK, I need I need repeatable tasks and I need to outsource those to the Philippines, South Africa, Columbia, whatever. Now I'm realizing that the people who can run my company can do it better and cheaper internationally.

And I don't want this to be a somewhere plug, but you you were like, dude, I could tell you how to do this without somewhere. That's like an anti ad. So great. You do it without us.

So how do you do it without us? So we get we get 60,000 applicants a month. Half those are from LinkedIn and Indeed and Monster promoted job postings. I'm going to tell you exactly how we do it.

The other half are from referrals and ads that we run out on the open market for people that already have jobs. But yeah, if you want to make your own hire, go on LinkedIn, post a job. I'd recommend Columbia, Brazil, South Africa, and the Philippines. Those are the four hottest places to hire in the country.

If you're looking for finance, there's Egypt, you know, engineers, Eastern Europe and some other countries, but go on there and promote the job on LinkedIn with $100 a day and run it for five days. Post the job in those countries on LinkedIn, promote it with $100 a day, run it for five days. So you're in what for maybe two grand. You're going to get a thousand applicants.

All right. But that's too many. How do I filter? Yeah.

So we have figured out and I'm going to pass this on to you is that of our 60,000 applicants every single month, 85% of them can't type 35 words per minute. And if we're talking about remote work in any role from engineering to marketing, to graphic design, to admin, to sales, executive leadership, your easiest immediate filter is typing speed, English, to us, basically. Yeah, we're getting that down. We're getting that down to 5,000 people a month.

They're coming in one about whatever 80% of people right away. Right. What's the next easiest heuristic to find? Great talent.

We're going to send them a request for a one minute video where they film themselves, introducing themselves for one minute. 80% of people are just not willing to do the work. They're not that serious about looking for a job. Right.

So the other 20% left with maybe a thousand. This is our example. You know, you with your job post that you got a thousand applicants, you're left with maybe 40 30 or 40 people that can type over 35 words per minute and have sent you a video. You watch the videos, you look at the professional maturity, you look at how that communicate, which is a big part of the job and you pick your favorite five to hire.

And then I love assessments. If they're if they're coming into a sales role, I love sending them five calls from my sales team and saying, Hey, break these down or quarter three minute video on how you would miss opportunities or how they would improve. And that's, you know, they're going to be left with three or four really right candidates in higher. Right.

Task based test over interview is huge. We do that in all of you. I didn't even mention the interview. I guess.

Well, I don't even I don't even get to an interview at this stage. This is how we do it when I do this with with Ben and our companies. And part of it is actually useful for you. So when you sit down and you say, all right, if I was going to give somebody a test that they could do in something like 60 to 90 minutes, what would most closely simulate the type of stuff I want to see them be able to do?

So now you get clarity on what am I actually looking for? Which most people when they go in interviews, they don't actually even know what they're looking for. That's like sort of the trees. Well, you make a lot of bad cars.

So once you do that, you get clarity, then they actually show you and now you're not just saying like, Hey, you talk to the person. How'd you like them? I liked him so nice. It's like, no, no, we have an objective way to say here's what one person produced.

Here's the other person produced. And we start with production because that's what we're going to want in the end is production and we will often I don't know if you do this, but we will often just pay to like, Hey, I'll pay you for the hour of time, two hours, whatever it is. Like it is a paid task trial because you're actually saving me money and time of interviewing and making a false hire because I liked you and we have a nice chat, but you actually weren't good at doing the thing. Yeah, exactly.

I want to give some people advice on like where to go as well, because I've learned a ton about what cities and what countries are hotspots for what type of talent. Um, Egypt, Cairo, Egypt is the cheapest city in the world and you can find people who can work magic and Microsoft Excel and Power BI for finance data, you know, this perspective, Columbia and Brazil are unbelievable for operations. They're on your same time zone. Just every single role, if they don't need perfect English, but not a sales role, South America is amazing.

Um, South Africa is a sales and finance hub. There's 30,000 South Africans that get on a plane and go to America every single year to do audit and tax work for big four consulting firms. They go back to South African and hiring for three grand a month to be a controller at your small business. So yes, there's unbelievable areas.

I love Sri Lanka as well for almost all roles, Philippines, obviously, there's 30 million Filipino's working for American companies today. It's just deeply ingrained in their culture. So to get people an example of the assessment, I just pulled one up. So this is what I use to find my assistant.

So I basically gave this out and I said, uh, I said, I want you to do the task and I want you to record a loom video explaining, um, what you did in the, as you do, we just, which tells me their thought process shows me kind of how they work and not just like the end product. And I also get to hear them communicate and if they're like the easy person to communicate with. So my assistant tasks, I said, uh, pretend you're booking a vacation from LA to Paris for my wife and I are ideal dates of this, but we're flexible on those by day or two. Here's our preferences.

Send me a couple options, the lowest cost option, the best option that balances convenience and cost and maybe the most luxurious option, more expensive, but whatever. I want to see them put together kind of a manual options. Cause typically how I work with my assistant is like, you get me to 90% and I pick and choose what I want. Another one I said, here's a voice note.

I put a voice note on sound cloud. I said of me dictating while driving, um, draft these two emails based on what I mentioned. And in that voice note, I'm like, Hey, oh, I got to, I promise. So I would introduce them to so and so, you know, I met them at lunch, blah, blah.

And then I try to see if they can just quickly grok, like basically, can I write a fuzzy address on an envelope and let's still get there, right? I'm not going to get perfect instructions. But sometimes I have to deal with imperfect instructions. I'll have them do simple things like, Hey, I've just moved from Texas to Wyoming and I don't have, I don't have to change my driver's license.

Can you figure out how I need to get like DMV work? Like, how would I get a new license? Could you do it all the way? And if not, what steps do you need me to do?

And then, uh, like make a birthday card in Canva for my daughter's birthday. I want to see like, do they have like basic design and event organization skills? And the last one was like, research says, like, Hey, I'm looking for influencers for this new product that I have, find me 10, 50s, 50s, this criteria. Let me just see if they're able to like quickly do data collection and research and be able to provide something useful to me.

And so like, those are examples of what tasks I put out there. I put in a, that's a one page Google doc and they send me a basically a loom video of them doing each task. And that's how I quickly filtered through, you know, 50 people, like summer basically, it's like, Hey, here's 50 people. Here's the four we like best.

I gave them the assessment. I didn't like the first four. Then they gave me another batch of four and immediately there was someone who was great. Yeah, they shine.

The person who's competent will shine to the top of the crowd without any work on your it's a beautiful thing. You were basically saying like, uh, you know, you find all these different talent. So people can go find it themselves. If they wanted to find it through somewhere, like what is the, what is the simple way to do that?

I mean, we, we prepared kind of like a special thing for your audience. You want to talk about that now or you just want to talk about like generally how to come. Yeah. What is it?

What do you have? Yeah. I, in an advanced this episode, I personally vetted and interviewed 10 sales people in South Africa, um, 10 finance folks in Egypt, Latin and South Africa and 10 executive assistants in Sri Lanka, Latin and South Africa. Got you did a personal vet shortlist for you.

I watched their videos. I analyze their resumes. What do you want to put it to email you or how do people get access to that? Yeah.

So they email me Nick at swaddysorta.com. Um, I can hook them up with some of these profiles, let them see them and, uh, hopefully help them grow their team. That's cool. I'm curious.

And you are always meeting interesting people partly due to having a presence on Twitter, partly just, you know, you have like one foot in the sweaty starter world, one foot in the tech world, the online media world. I'm just curious. Like who have you met recently that kind of either inspired you or like, you know, broke your frame in somewhere or somebody who you think is doing cool stuff. I have one person in mind who's building a pest control, like monster of a company.

I don't want to out him. It's just incredibly, you know this. You've actually taught me a lot of the stuff is that they find one thing that really works inside their company and they just run the same play for five or 10 years to grow a company monster. I didn't think that business worked that way.

You could do one thing really well and everything else. You know, you're not hiring internationally. You're, you're not doing the latest software. You haven't even looked at AI.

You're not answering the phone past five or one PM, but you do this one thing. Well, and you're on the $100 million. Right. Today's episode is brought to you by HubSpot.

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Because when you know more, you grow more. And so if you want to read the whole book, instead of just reading part of it, visit HubSpot.com. Have you ever seen Peter Thiel taught a class at Stanford and they put the class notes online and it's been there for a lot of times called the, the Blake Masters notes or something like that? Do you ever read those?

No, what's the main takeaway? So he's got one, which is he's like, you know, I get a lot of investor pitches and yeah, I've invested in, I was, you know, the seed investor in Facebook. So you gave some huge winners and you have a bunch of losers. What do you notice with them?

And he's basically, he's like, one of the biggest poker tells with the business is when they have seven revenue streams that actually they think they come in and puffing their chest and saying like, look, we've got seven. And he's like, all they've told me is they don't have one great one. And same thing with distribution channels when I ask them, how are you going to get customers? How do you get customers today?

And if they tell me seven things, all that tells me is they don't have one amazing thing. It's like all the best companies. And this is the best companies. They find one, they basically end up with one distribution channel that really, really works and one revenue stream that really, really works.

And so I can offer Facebook, for example, the distribution channel that worked was viral photo tagging on campuses, initially, and eventually off campuses. And then the monetization was ads and Facebook didn't need to sell stickers. It didn't need to do like a thousand other things that all the other social networks were actually doing. Like M&Ms did a homepage takeover.

And we signed this deal with this movie studio and they're going to do like a cool campaign with us in partnership. And like Facebook was like, self-serve banner ads will be the thing. And this and this will be the growth tactic. Brad Jacobs, Brad Jacobs with Howie Green Knight of Reynolds and several of these other companies.

He ran the same place. What was his, what was his, I don't know. I'm sure he had several different plays, but how you make a few billion dollars is like you find a way to grow equipment rental business through is it local ads, is it outbound sales? They had a really good outbound sales team for contractors and then boom, that business skyrocketed.

He pulled the same executive team, pulled his main players out of that company, once it went public, put them in the next one. And boom, you know, that's how you grow five companies in a row. Figuring out what companies that play will work for. Right.

I've told this story, I think before, but it's, it's probably one of my most like, I don't know, humbling and insightful moments. Yeah. Like you hard lesson learned very quickly. Yeah.

Bandic got ripped off for me. So we have a buddy, Sully, who you know, and Sully's like to me, my business Yoda. Like if I got a business problem, I go to Yoda and he gives me like, he can't even really explain it. He's sort of like, he sees through all the noise that I bring him and he just finds the thing.

So my e-commerce business was, was early on, it was growing. And so I think we were at maybe 100,000 a month in revenue. So like, you know, like a million dollar thing. It's like early on.

And how do we get there? We were doing Facebook ads. He told me do Facebook ads and focus on Facebook ads. And I was like, but what about Google?

He's like, but what about what I just told you? I was like, okay, cool. So Facebook ads is working. I feel super accomplished.

We've gone from zero to 100 K and like three months. This is awesome. So I go to him. I'm like, dude, it's working.

I'm thinking now we should do influencers and we should do go. We should spin on Google. Cause you know, of course, who doesn't do Google, but like, I really think influencers work. Here's this cool influencer idea I have.

And he would just basically just cut me off and he was just like, he's like, you want to win. Right? And I was like, yeah, he's like, cool. Don't say the word influencers until you're at 300,000 a month just off of Facebook.

And I was like, well, would it be bad? So let's like do both. He's like, well, here's the thing. Is there any reason you believe that Facebook can't get you to 300,000?

No, I forgot. Just 100. Why couldn't I get it to three? And he's like, and if we couldn't get Facebook to three, do you think any amount of influencers is going to save us?

Like no, like a successful econ brand should be spending basically a one million plus per month in just Facebook ads, right? Which means you're making more than a million dollars off of Facebook. Like that's where you're trying to get to. That's the goal.

And like, you kind of have a broken company if you can't really get there. Like most econ companies went off of Facebook ads. Like you should just try to win off of Facebook ads before you go to all the shit. And so just and I was like, I had expected when I was like going to get advice from him that he's going to give me these amazing strategies, these like new hacks, these brilliant tactics.

And actually the most useful thing he did for me was just say, don't say the word influencers until Facebook is cranking 300,000 a month to your business. And just and by the way, we kept it going after 300, 500, we did a million. It's like, you just keep going off of just those two. Guess what?

I still don't do influencers. Like it's five years later, we didn't need it. You know, and I definitely would have distracted myself with what sounds like a good idea. And it comes back to the Steve Jobs quote, which is focus is not about what you say.

Yes. To say no to otherwise great ideas. One of my companies was making, you know, spending upwards of $150,000 on pay ads a month. We realized that our row as is barely breaking even, we calculated it down to profit and realize that that piece of the company was making us maybe $15,000 to $20,000 a month in profit and we're spending tons of executive time and energy to try to get that to work.

And we looked at our other part of our revenue stream and it said referrals. Referrals coming in the door generating $250,000 a profit per month on, you know, maybe $30,000 of referral fees and discounts. Um, why, what would happen if four or six months our entire executive team lays our focus on growing that referral number? And do we think that we'd be better off than, you know, maybe the last year and a half.

We've been trying to get, you know, slam a round peg into a square hole. And I think it's unbelievable. The job of a CEO sometimes is literally just to tell your team, no, and to get them focused on what's already working. Yeah.

Yeah, exactly. And not hedge. Like, you know, I would, uh, I would say no, but then we kind of greenlight this little test. I would say no, but then like two weeks later, we just do it anyway.

What happened to her? No, was that not a real no? And I think there's all these ways where you can think you're compromising or you're, you're having your cake and eating it too, but actually you're just doing your cake on the floor. Um, and it's better to not do that.

All right. Let's take a quick break. Cause I tell you a story. Let me tell you the first time I tried to run payroll for my team.

I was using a traditional bank and you know, the type of genki interface. It's built like a 2002 tax form and it was open only during business hours. And I hit send in a froze, they flagged the transaction, they locked my account, they put me on hold for 45 minutes and then they told me I got to visit my local branch. And that was the day I started looking for a new bank solution.

After asking a few founders what they were using, I found out about Mercury. And so now my payroll is two clicks. I can wire money, I can pay invoices, I can reimburse the team, all from one clean dashboard. That's why I use it for all of my companies.

And so do 200,000 other startup founders. And so if you're looking to level up your banking, head to mercury.com and apply it in minutes. Mercury is a financial technology company, not a bank, the services provided to choice financial group, call them in and evolve bank address members. You said running a hold code is overrated.

I think the trend will die down. Most rich guys, I know are focused on one big business and built it for a long time. So hold codes or these portfolios of businesses like you were doing was a very, very big idea or popular idea in our circles and our bubble about five years ago. And it was not a new idea.

Hold code has been around for a long time. Give me your updated thoughts on the hold code. Man, I think over the last three or four years, I've been kind of labeled as one of the hold code guys, you know, there's several more of us, but I've had a lot of people reach out, you know, I got this plan to, you know, I'm going to buy more companies. I'm going to do this.

I'm going to do that. I'm going to grow to five, eight, ten companies and the synergies and all this stuff. I think you really got to know your shit. They're running more than one company.

And the majority of people that I know who run more than one company, they ran just one company for a long time, made it really good, made it really profitable, learned how to build executive teams, learned how to build compensation plans, learned how to work the funnel and convert it the highest rate all the way down the funnel. If you don't know those things and you start going around buying different companies, especially if you use leverage, borrow money to do it, buy companies, whatever it might be, things can go really wrong really quick because unlike real estate, which was my first business where you get a couple clients and they pay rent every single month, operating companies, man, you can have massive swings in revenue and profit. So yeah, everybody thinks it's cool. Another thing about it is you just solve freaking problems all the time, like the biggest problems in each individual company bubble up and come to you.

So yeah, I don't know. When I look at some of the wealthiest people I know, the wealthiest people that you've had on your pod, almost all been focused on one thing and made that one thing really big. So I think there's something to do that. One source of problems rather than 10.

All right. Another one you have here, consistency is underrated. You're on the consistency train. What's the area take here?

Yeah, I think it's really easy to get excited about something and jump in and be delusionally like focused on one thing for one year, even two years, whether it's business, a certain idea, your physical health. I know people who are either running a marathon and cutting calories and super fit and super clean and super healthy, or they're totally falling off the rails and to the opposite while they're focused on something else. It's kind of sexy to just jump in and be totally all obsessed with something that people who win are like even keel. Maybe they're not working 70, 80 hours a week.

Maybe they work 50 hours every single week for their whole career or even 20, 30, 40, whatever it is. But it's hard. It's hard to stay excited about something for a long time without getting burned out. But I think it's a superpower.

Like if you can be even keeled in all areas of life, I'm not just talking about business, but mostly business. If you can just keep from gaining weight up the first time, it'd be a lot easier to stay healthy the rest of your life. You can just stay focused on one business or a certain way that you do things and, you know, get after it. You can really win.

I know a lot of guys who they're either kicking ass inside their companies or they're like totally checked out and like ignoring the hard decisions. I think that's how they would get there. And they wouldn't have thought they would get there, but how do you get there? You get there because you didn't understand how to have a sustainable burn.

You had a bonfire and then it goes out. I used to be in college, like a proud procrastinator. I would wait until the last minute. I'd pull an all-nighter.

I'd study. I'd pass the test and I would wear that like a badge of honor and it became like a terrible habit and sort of identity to build around. It was this thing of like, oh, when I turned it on, I have this crazy intensity. Nobody to work harder than me for that 72 hours.

But then I'm going to crash. I'm going to procrastinate because I know I always have that in the tank. And it's this sort of tortoise and hare thing where you just realize that the tortoises win in life and the tortoises that just keep putting one foot in front of the other every single day, they win. And so like I've actually far shifted my philosophy where now when I hear about somebody who has that same attitude, I used to have of the badge of honor of like how hard they go and how crazy they're working.

It's a sign of weakness. It's like, oh, you just don't have systems. Oh, you don't understand leverage. You don't have to judge me.

You don't know where to put your energy. So you're just putting it everywhere because I used to be that guy. I slept in the office when I slept in the office, I remember slept in the office 224 days out of the year. I thought that was me grinding.

Actually, it was me highlighting to everyone waving the flag saying, I'm an idiot. I don't know what to do. So I'm just here all the time just manically doing anything I could think of, right? And now I have a totally different productivity routine, which is basically I call it the one big thing method.

So every morning, I decide the one thing that matters that I get done today, one thing I put all my core focus on and I give myself two hours to focus on it. First thing in the morning, no distractions, don't check socks, don't check the mail, don't check Twitter, don't check anything. And I just focus on that one thing for two hours. And after I'm done with that one thing, anything else I do with the day is gravy.

I can go play with my kids, I can go work out, I can do a little more work if I wanted to, but doesn't matter because what I realized is the person who wakes up every day, 365 days identifies the proper single thing that matters and puts full focus on that one thing for even a two, two and a half hour time. Right. They will crush the average person who simply doesn't even identify the one big thing, because you have 365 days, you have a hell of a year. It's the ability to zoom out.

So many entrepreneurs, they're so focused, they're so intense, they're so jammed up in the weeds inside their company. And look, sometimes you got to do that. Like I've been in the weeds and several of my companies, but the people who can really zoom out like you're saying, what really matters here? And you do that for four or five years, six years, 10 years, 20 years, right?

And father time, it's really sexy to build businesses fast and exponential growth. And you hear about all these stories we read about them and it takes over media, especially social media. You've seen that meme almost at this point, it's not supposed to be a meme, but it looks like a meme now. It's like fastest company to 100 million ARR and it's this these charts and it's like, well, slack took seven years and then it's like, we did it in two weeks.

There's like the new AI company that's got a straight line up. And then somebody else comes in and says, we did it in two minutes. We did it in two seconds. And that's what they're all trying to beat each other to this like sprint to low quality revenue.

And I think it's so funny. It's like in the big short where he's like, why are they confessing? He's like, I'm not confessing the bragging. And it's like, I think they think that's a great thing.

And it's like the more impressive chart is the one that looks like Qualtrics. You know, we had the founder of Qualtrics on it. He said, he has a huge sign in his home office. It just says, tune out the noise, play the long game.

And he was like, dude, for seven years, nobody cared about what we were doing. We were single mindedly focused on getting 150 universities to use our thing. Because we knew that was super important. If we did that, we had a real business and it took us time, but we just stayed scrappy.

We stayed focused. We just did that for years before we ever got any press, any social media, anything. And it's like, that's who you don't want to compete against. Somebody who can do that because they're building this giant foundation of what they're trying to do.

It doesn't mean go slow. It just means don't get fooled into thinking that you need to sort of quickly sprint and just grab some revenue number out of thin air as like what success looks like success is the sort of durability over time. There's expectations. Like people have to realize that the expectations of yourself as an entrepreneur in your career, they depend on your last six months, your last 12 months, your last, you know, two years.

If you've had that hockey stick exponential growth, like think about how you have to follow that up. And I think some of those entrepreneurs kind of dream of a world where there's no investors, nobody watching, growing slowly over time, building something sustainable. Yeah. Okay.

You have some other ones here. You said being a YouTuber is the hardest job in the world. I think the coal miners might disagree, but go ahead. Well, I think social media is changing.

Like we can talk about how the X algorithms change, how it feels to be a content creator is totally different now. You almost have to be video first. I don't know if you feel this Sean, like if you aren't on YouTube, you are not growing right now. That's true.

I think there's always exceptions, but it's largely true. And I've said this before. Video is the language, the native language of the internet. So it's like going to a country, if you don't speak video, then you are not going to be able to communicate because that's what everybody here speaks is video.

Sure for a long, long form, doesn matter. Yeah. As an entrepreneur, I'm really hesitant to get on that hamster wheel because I see, I see what the life is like. Okay.

You got this banger video, your influence grows. Got to follow it up the next week. Got to follow it up the next week. Got to follow it up the next week.

And you got to be on. And then we go back to that consistency conversation that we just had living that life for 10 years, living that life for 10 years. Like how would that look? How would that feel?

I think it's a very difficult job. I have a ton of respect for people who do it. I think it's still worth it. But in my opinion, the value of personal brand on all things, not video is going down, in my opinion.

All right. One more spicy opinion here. This might be the spices of all. AI is bullshit and unsustainable and will decrease quality of life for the 99%.

Wow. Say some words about that. This is just like the internet boom, where, you know, point one percent of the companies will survive whatever happens when the bubble, you know, changes and we'll go on to change the world of the next 20 years. I'm not doubting the long term power of AI.

I'm just looking at the money, the hype, the energy that's being poured into it. I'm spending a lot of time inside my company's trying to implement AI. We're adding tools and I'm just not seen it, Sean. Like AI is unbelievable for me having a doctor in my pocket or me doing recipes or my wife, you know, you know, doing little things, but man, like where's the long term value?

And then when I think about where it's going, I'm seeing my energy bill in Athens, Georgia, which is not an energy, you know, like an area with an energy crisis like some areas of Texas and California, my energy bills went 60% in the last three years. They raised it six times. Wow. That's because what data center is being built or while I double there's 30 data centers that have come online in Georgia in the last four years, there's still 30 more in the pipeline being built right now that have negotiated unstable energy rates with the local municipalities.

Where does it stop before? Like, okay, the companies are able to put AI in place to replace employees, but the energy costs, this is why I think for 1% of people, it could get really ugly or for the rest of the people could get really ugly. Like, what about your ability to run a dishwasher or run an air conditioner or run a heater in your house, which all require a massive amount of electricity that gets more expensive for almost everybody. You have less money to spend on other things to make quality of life better.

So yeah, hot take, but man, I'm very bearish on AI right now. You said it's bullshit and unsustainable. But you said also, you said in the next 20 years, it's going to change everything. So it's not that you think the long term is you're saying that something today is over promised.

What is it? You're saying personally, you're getting value, doctor in your pocket, recipes, life, day to day stuff. We've canceled 13 11, like there's something I really like the others. I'm just like really, really hard to justify the cost already and they're subsidized all the way down the chain, you know, the video selling the chips, they're making the bank, but you know Amazon cloud services.

They're subsidizing it all the way down to the actual company that's VC back to subsidizing the data usage to try to do the land grab. So it's got to get more expensive. And I also feel it's kind of like the electric cars and self driving with you on Must I feel much different about AI. Do you have a Tesla?

As soon as they make a cyber truck that doesn't look like a cyber truck, I'm all in. I want full self-driving. I know how safe it is. I'm not going to drive us today because they're not safe.

So my T-B I have written in full self-driving. It is mind blowing. I want it. I need it.

But is it going to be widespread? Are we going to have, you know, Robo taxis like Stanford just go all over the country? I still think we're 10 years away from it. And he wants it to be 2012 that we were going to have this happen.

Yeah. His timelines have been wrong. But I think that's more of that's less to do now with the tech in order to do with regulation at this point. So I would say it's a different question.

You mentioned pest control. Are there other businesses that you found interesting or like, you've been surprised at how well they're doing or a niche that you know, you've nerded out a little bit? Everybody wants to start a marketplace. I think maybe I'm five or 10 DMs a month.

If somebody's saying they found, you know, there's a kitchen cleaning, you know, you're going at night and spray down hoods and cleaning inside of a kitchen. I want to start a marketplace that connects restaurants to these people. Right. And then I was doing my roof on one of my commercial properties.

And our bid came in to do this roof. It's about 10,000 square foot warehouse at about 70 grand to do the roof. And I'm like, that seems high. Like, let's do some more work.

And I found out that I can hire a sub for 30 grand worth of labor and I can buy 15 grand worth of material. And I can, that's the hard cost to do this job. And these roofing companies are making this bread. They're making this bread.

So they literally don't do any work. They sell the job. They're making it is very insurance. And they show up and stand there and watch and make sure there's only a job and make 20,000 ones in a two-day job by getting a sub by actually selling job, putting their name on it, and building the customer, collecting the money, pay the sub and move.

So is that sexy and exciting? No, but are there a lot of waterfront around every time in America making 5,10 grand a day. Yes. We all have yet to be a fun example.

So at my daughter's school, I opened up my other parents and said, Oh, cool. What do you do? One of the guys he does and I'm so lack of hand in there He's bringing framing. Framing, defrostington's Codex coding here.

But you don't like to build part of it or what have you framed that you built. How's it going? Where's the project? Have I seen it?

What do you do? He's like, I'll do hotels. Have you, is it one I've stayed in here? He's like, well, I do all my work in Alaska.

And I was like, Alaska. And he's basically like, again, works smarter, not harder. You know, his take was basically, look, I can be the 1,000th best framer in California right now, coming in as like a new guy into the space, who doesn't have 20 years of referral relationships with all the other contractors and try to scrape and claw, do business with expensive labor here in California and have to be, you know, competed down to the bear margin because they can bid it out to 30 guys and whoever comes up with the lower price options is gonna win. But if I go to Alaska, it turns out they just don't really have any, very, very many friends.