How to manufacture a billionaire childhood

i got something sean i just had the craziest thing happened to me one of the craziest things that i've ever happened to be do you wanna hear sorry does it have to do with those glasses no but i have a cool guy so that's why i decided to wear them okay i feel like i could rude where i know i could be what i want to put at all in it like a days off on a less travel had one of the craziest things happened literally just forty five minutes ago i was walking down the street in new york city near my house and do you know honey i shrunk the kids yeah the movie from back of the day of course rick what's his name i know his first name is rick i had to look up his last name you're dad yeah i saw him i'm walking i saw him i'm walking down the street and i felt bold and i walked up to him and i said excuse me sir i just like huge fan i grew up watching your movies and i kid you not he was like what's up man i appreciate that also i've seen your videos you you're cool you know i like him my fam and i was like are you kidding me and i go rick i'm here talking to you now like if you know mfa and then you know this like as part of the s like did you just kill it in the nineties with movies and he goes i killed it i go really like really good he goes do you have a few minutes i yeah rick i got a few minutes he goes let me show you something brings me up to his apartment this beautiful apartment overlooking central park beautiful i'm like you really did well and he was like yeah so like you i bought this from harrison ford beautiful apartment and he's like look in the nineties v dhs were just pieces of plastic and they're were twenty five dollars a piece of course i killed it and i walk and i'm like walking there's a apartment and i'm like rick is that an original salvador dolly painting and he goes he point at it he goes ghost and and he is kept walking so awesome none of that happened i just i did see him walk by though i none of that happened he did walk butt and he didn't walk by though and imagine i imagine that that could have happened though what a roller coaster emotions you just took me out that was fantastic what so you even see the guy or the entire thing was fictitious i saw him he lives he lives near me i did see him and in my head i went through all these things like you know when someone like insults you and you think i would come back like thirty seconds later i like thought of all these things that could have happened if i said hi to him but i didn't yeah i'll i'll never know turns out though he that was an episode of me that was right fantastic turns out he quit acting because his wife passed away and he decided to raise his kids so you know he's just an nice old man now he's in his i don't know what you do to be today dude this since wednesday morning give you give me a a breaker do you ever watch the tv show dave of course i love it my favorite show there's an episode i don't know if you remember this episode if you've seen this episode like in one of the later seasons that he where he accidentally faces on death that he's seen this no i've only seen season one but that that is something he would do well basically he his there have this jan tour bus this is not too big of a spoiler the tour bus like explodes and someone was filming and it's like his face on the side of the tour looks like he died and his phone his phone had died this have no signal they're like out somewhere and so for like you know eight hours or whatever after the tour bus exploded he doesn't have any signal so the whole world thinks that he died and then he logs in and he's like oh my god everybody thinks i died and he's like i gotta tweet out that i'm okay and his manager like but just wait a minute because there's all these like memorial it's like it's out worrying of like people say how much they love him like drake is in his dms is like bro like you know what i always love your shit man i'll i'll miss you bro and he's like kinda revel it but then there's no way out because you know he's like the the longer he lets it go the harder it is to get back to to just like come out and doug just kidding guys i'm here because then you're seeing is like the ultimate asshole but he can't resist because the the idea of what it would be like is too into for him he's like you did something like that to me just out he's he's like is he's like he tweets her his manager tweets out like you know dave rip and he's like he he's not dead i just want him to be have peace right yeah that rest peacefully rest in peacefully alright i have a i have one interesting thing that i could that i could bring up let's do billy the week we have done that in a minute i have an interesting person billy of the quarter i guess since we the quarter i haven't done this a while well it's the billy of this week it just we don't do it every other week have you heard of a guy named jim rap rat sir jim rat no i don't know who that person is okay so listen to this here's a story this guy named jim jim rec he's really interesting to me so he's born in manchester england which is sort of like a blue collar it's kind of like the boston of america of england it's like you know white blue collar you know hardworking kinda of poor he studies chemical engineering he becomes a chemical engineer at an oil company but like things are only going okay and then he has a background in accountant accounting he studies accounting and chemical in engineering in college and he gets a job at a pe firm went at the age of thirty five and he's like this is pretty amazing like you know this is a great way to make money i i like making money but at the age of forty he was like alright i'd worked for another guy for long enough i wanna try and do this on my own he doesn't have a ton of money i think he had a home that he owned and he had like a hundred or a hundred and fifty grand to his name and this was in the late eighties and so he partners up with a guy and they're like okay we've been buying companies for our employer are are the the firm that we work for let's try and do it on our own and they convince some of their old clients some of their old lps to invest in them and they spend about a year looking for a company and so with three million pounds in equity they buy a eighty million dollar eighty million i'm gonna say dollars but i mean pounds but eighty million dollar company that is a spin off of bp basically bp the oil company owns a chemical division which basically makes like chemicals so like the commodity that let's say like your toothpaste has like you know fluoride in it well someone like has at the fluoride right whatever it is the chemicals that make like plastic packaging whatever they buy that unit from bp for eighty million dollars of which three million dollars was equity and the rest was debt so like a a really heavy debt thing and he mortgage his home he uses one hundred percent of his money he has two kids and a wife and they're like my he was like my wife like we've talked about it for six months like should we do this is just like you know this can ruin us is gonna ruin our careers this is gonna we're gonna use all of our money but you know what we have to take a risk and so he does that in nineteen ninety i believe and by nineteen ninety seven at work this eighty million dollar company is now worth like a billion and a half and that's how he makes his initial money and over the years he's kinda kept that one thing i think it's called inn is the name of the company it's a chemical company that you probably have never heard of but to to this day or today it does about forty billion dollars in revenue employs many tens of thousands of people it's one of the largest chemical companies in the world at this point and basically the way that he's grown is combination of pe and his chemical engineering background so he understands chemicals but his whole stick was finding like spin offs that conglomerate didn't want to own anymore because it was a distraction he would buy it for whatever he would pay for and his goal was to double the eb in five years that's like sort of standard stuff that's the kind of the boring thing that he did but now at this point he's i think the number one or number two or three richest per person in england amazing but the more interesting part in my opinion is what he has done with his money so check this out do you remember the two hour marathon with el k that nike did like four years ago yeah recently right well someone actually just broke two hours recently but like four years ago or three years ago there's this amazing runner named either kip and they set up like the world's perfect setup up for him so they have had like a pace car that was like perfectly in front of them that went on pace for an hour fifty nine minutes they had they did it on a f one track so it was perfectly flat and they let them wear shoes or he decided to wear shoes that weren't technically allowed in sanctioned races but he was like you know this is just a spectacle let's do it and so he broke two hours in the marathon well jim rat is a huge sports nut he's run fifty marathons he's gone to the north pole the south pole he's climbed all these mountains he's like one of these crazy guys and he was the under writer of that he paid for the whole thing just because he also owns a ton of different sports leagues so he owns team sky cycling so that's a team that won in two d france eight times he has he owns one third of mercedes f one team he owns one of the best america cup sailing team he owns twenty five percent of manchester or united soccer team he used to own chelsea which is you know a big soccer team but the really cool thing that he's done recently have you heard of a car i think it's called the gran deer have you seen this car google this car and tell me if you've seen this it looks like a g wagon or a defender yeah yeah it looks a lot like a g wagon okay so check this out so in two thousand and sixteen this guy jim he loves defenders now the thing about defenders is land rover and i think land rover is owned by jaguar so jaguar still makes the land rover but the real famous ones are the old ones the ones from like the eighties and late nineties those are really cool they're really box but although enthusiasts love them and they pay sometimes hundreds of thousands of dollars for these cars you can't really buy new parts anymore because jaguar just quit manufacturing it and he is a huge ent of this of the defender he loves it and he's a rich guy so he was able to get a meeting with someone high up at jaguar and they go to a bar called the gran bar and the gym is like trying to persuade them like hey you know i'll even help pay for the tooling is there a world where like i think it could be for shits and giggles it would be fun let's remake some of the parts for the defender because the defender it's the most comfortable off road car but unlike a lot of new cars it's still got a little edge on it you know it's got like it's like it feels not too luxurious it feels like a proper off road car and they're like now man this makes sense we're not gonna do so he's like you know what fine i'm just gonna create a car company that's what we're gonna do and so within his chemical business they create this thing called the g it's a suv that you just saw i think it sells for like eighty or ninety grand it has small cult following in america i think it's pretty big in europe up as well and he's like screw up we're gonna make a car company just because i love these cars so much but they don't make him anymore so i'm gonna make what i think it should be by the way it should be done and so there's a famous line where just to give me an idea of what he's like he said it's the most comfortable off road vehicle bar none and the journal says like yeah but like those late models they don't like feet they don't like fit the environmental standards up today nor are they really that safe and he was like what's wrong with that and he's like he goes what's wrong with that they're effing and great cars and so he starts making these cars and that's where we are now so these cars have a huge cult following in america like my car nerd buddies like them they're known for being like kind of spa in the interior so if you look at the interior they got these like the switches look like switches from like a tank a little bit like it's like all mechanical stuff and they're kind of a pain in the ass and the truth is is that it's a horrible business since two thousand and eighteen fee has lost two billion dollars on this car company last year the company was negative three hundred million dollars in profit not going so good but it's it's awesome alright let's take a quick break this podcast is called my first million and it's probably the question we get asked the most how do i go from zero to making my million and so i did it episode a little while back where i broke down exactly this sort of philosophy and frameworks that i would use so things like finding your white belt business or identifying your bear on the uni cycle advantage the core way that your two skills could overlap or why maybe starting a service business better than starting a software business for your initial businesses to make that first million and so the team at hubspot has created a guide that took the stuff said in that episode they laid it all out for you you can get it for free in the description below just click that link and it's all yours alright back to subsidize what do you love most about this guy i he's got a you attitude that i really dig i literally really like if you google them you'll see that he's wearing a barber wax jacket which is sorta of like an adventures like jacket it's like what like kinda like rough and tumble blue collar like guys where it's like work wear and i appreciate that he still has a little bit of edge to him even though i think he's like the nine richest man in the world so i really appreciate that and i also appreciate that he does shit just because yeah there's something great about the i don't know if you wanna call it side quests or the just because or the f fu attitude but i think both of us love that i have this thing that i keep running called the side quest hall of fame and started because palmer lucky was on joe rogan you know palmer created oc we created the leading vr headset sold it for a few billion to facebook then he created and the leading you know the first kind of like significant tech company that was doing defense stuff worth like whatever hundred billion dollars whatever it's worth right now and he goes on rogan and he says oh you know what i wanna do next and i'm expecting him to say a company like another startup and he's like i wanna create like a privately funded version of the x files he's like i just wanna go hunt for aliens and he's like i'll fund it and we'll go find him we'll figure out what's going on he's like i feel like the government's is not telling us everything i was like well that would be an epic use of this person's talent and money and you know since then he's done he did this thing where like basically brought back the game i own one i i was about to bring that up he's done n sixty four and game yeah he's got mod retro and say so he's just he does does school shit and then you know he he's kind of like these you know dresses ec all the stuff and i saw this video recently that you know was i thought a more enduring side did you hear the the the video about why he wears the hawaiian shirts no it would someone make fun of him one time and he's like was gonna do it out of spot well he was like we grew he's like i grew up really poor and so i didn't have we didn't have any money for new clothes so i had to wear my dad's old hawaiian shirts every day like that's just all i had my wardrobe was like seven of these and i wore them and i got made fun of but that's all i had so i wore them and he's like and then when i sold my company you know he says something where it's like i got like i got some money i tried to change like i tried to change and then he's like basically reverted you like actually i'm just gonna wear the shirts set like i like and i know and like this is what i'm all about and i don't need the fancy clothes to like validate me as like i've done it and i love that other thing he he carries that f fu energy with him pretty much everywhere a thing that he has that i don't find him to be a heart i don't find him to be ins inseparable i find him to be someone who's confident in his opinion and you could challenge him and he's open to new ideas but he's very confident i find him like at a very young age i mean when we talk to him i think he was thirty three and he was like saying like here's the thing about defense contractors they're doing this wrong that's a very bold thing to say right and i appreciate that about him and i used to meet these people and i used to think how do i become like that but now i think how do i raise children that are that way how do you raise kids that are that confident at young engaged but not in an inseparable way and also in a way where i think they've backed it up by studying whatever they're gonna say you ever thought about what do you think his parents were like i i guess he said he was raised poor so he had a not a wealthy family and yet they still were able to like instill the sense of like you can do it and you can figure this out well i'm not sure how much it is watering the plant versus the soil you're you grow up in so for example there's a reason that the most successful people on earth typically come from disadvantaged backgrounds you you go look at you know why is you know sort of d so common amongst successful people it's like and is this disproportionate well you know you would expect it to be the proportion of d disability in the population but no it's a higher percentage in successful people or you know why are you know so many athletes come from you know poor families and single single other homes and things like this like you know they don't have all the training and the advantage and the best gear and the best anything right but like they have the one thing that can't be bought which is like this sort of ins hunger and so i think that confidence is a byproduct of the adventure and adversity you've faced in your life so you don't just say be confident actually the advice to somebody who wants to be confident is go have more adventure or adversity it'll will make you will get hardened by confidence over time because the more adventure you do where you put yourself in unfamiliar situations or the more adversity you face and you come out still surviving even if you didn't win but you survived then the next thing doesn't seem all that scary you sort of think to yourself i did all those things of course can go into this new unfamiliar situation and thrive as well and so i think that the confidence is not so much like you know as parents told you but but like you know the environment like if you grow up and your poor but you're tinkering or your nerdy or you have access to certain books you know it's it's kind of amazing how these very small things make a difference there's a story i read this morning actually about dan brown you know who dan brown is the author he wrote the davinci code and like oh okay a bunch of other like thriller adventure books yeah where hero goes on a quest they're sort of a puzzle they gotta figure it out growing up dan did not find christmas gifts under as christmas as a child his father richard brown a math teacher instead put a treasure map under the tree a dan would have to follow the treasure map to for for a trail of clues all over the house and sometimes all over the neighborhood until he finally found the present this sparked a deep love of solving puzzles cracking codes and hunting treasures he channel this into vinci code angels and demons and other thriller that have sold more than two hundred million copies all about cracking cipher un tingling coded messages which is which is the heart of his books a lesson from this a childhood obsession can be a source of infinite inspiration if you wanna seek a meaningful quest as an adult look towards the childhood toys and games that you couldn't get enough of there there may be clues in there it's so funny that's the that sounds like a cute thing but there's been so many times and i wonder if there's actually like research app verifies this but there's been so many times we had robert greene on mfa a while ago and that was really great and he said find the thing that you wanna dedicate your life to you have to do something that sounds easy but it's really challenging which is you have to revert back to what you were like as a twelve year old before you had people who put pressure on you before you realized that something was stupid or un cool and before you got jade and when you're ex and you have to ask yourself what was that thing and i have heard people talk about this constantly of like in order to be great as an adult you have to do this challenging thing of pretending to be a kid and where were we weird as a child yeah what what would it be for you so if you think back to that era what were you doing you're twelve thirteen fourteen you know let's let's take this window eight to kind of fourteen years old skateboarding a ton i was skateboarding a ton and i was always taking apart remote control cars and building them back to building them in interesting ways to get out doing chores for example i spent a whole six months trying to rebuild the remote control car so i had a mop on it because i hated sweeping the floor and i distinctly remember doing that and being obsessed with it or and building model airplanes like assembling things that had clear instructions i love doing so i mean in a way you're you chose to build things instead of doing nine to five instead of doing a job yeah well i also loved i i had a huge passion for selling cds i remember i used to make like thirty dollars selling like three dollar you know burned cds and i love doing that and for the longest time i thought i was gonna be in the entertainment industry my hero was ari gold from the tv show on entourage and i went to belmont university because they had this degree called the music business degree which i made it through three years and i was i'm gonna drop out of school just give me like the easiest degree i can get like with the credits that i got so i didn't get to complete that degree but the reason i got into media and the reason why i probably enjoy doing this and working in the content game is because i wanted to work with entertainment people but then i realized that hollywood is full of idiots and i hated them but i can build my own little world like that yeah i don't know how much of this is like horoscope or whatever where where you just sort of you try to back test and fit fit anything into it but i just was in austin yesterday and i did a podcast with von o'brien mona has this thing where he tells these stories about buffett and he says his his theory is basically that a huge percentage of your personality is pretty hardwired and baked by the time you're five years old and you you don't wanna spend your whole life fighting your your nature that's the first thing and then he says that for kids we do pretty much the opposite thing we're supposed to do so he says the human brain if you just look at brain science is that there's a golden window between i think he says the age ages of eight to eighteen so does ten year window where a child's brain is developing in such a way that it can it can specialize and do some incredible things if you specialize during that window and the people who do and if you go look at like oh bill gates when he was coding or mark zuckerberg when he picked up programming or mister beast when he started doing youtube videos at age twelve like it's often that these people who become the extreme performers that they were doing something pretty specialized during this golden window and he's like in school we tell them to do the exact opposite hey go to school spend thirty minutes in eight different subjects don't you know go in inch deep in each one don't care about anything you know don't specialize become this like super generalist that's the factory model that we so he's like it's we're doing them kind of a disservice he's like your job is a parent is you know by five their nature is is somewhat vague to observe it in eight to eighteen if they show an interest or an obsession at anything feed it let them go crazy with it let them get obsessed and lastly like get them around as good of a peer group as you can those are really only things you're gonna be able to do is kind of his opinion i don't know if i fully read that but i think it's interesting and then he tells a story of buffett and he's like you know when buffett was a kid he did all kinds of little hustle right like he would buy a thing and he would sell it right so coke bottles and pin ball games inside of bar barber shops but one of the things he love to do was he would go to the racetrack and he would watch other people betting and he didn't bet he was a kid but he would watch other people betting he would watch the horses study the track and then what he would do is at the end of the day he would go collect all of the discarded bedding slips that the you know people go to the horse track they drink they watch the thing they're having a good time they just check away their their their betting tickets and he would see that oh actually this wasn't a this wasn't a losing ticket that actually they got a third place payout here they didn't realize it or they got a second place payout here they didn't realize it he would collect all the and you know eighty ninety percent of its trash but if even five ten percent he could make some money then he would ask his aunt to go cash the tickets form and shoot here that's how he made money and like it's not that different than what value investing is right he would go look at a thousand companies a thousand tickets you know most of them are rubbish but when he found one that had like hidden in value he would pounce on it and he would make money and that's essentially how warren buffett you know invested for the first you know whatever ten fifteen twenty years of of his of his investing career and he bought his first stock when he was seven and you a so he was doing things in this kinda of golden window as well which i think is interesting especially you know for you and i we have kids not at that exact age yet but you know i think about that stuff i don't know to what extent you can control it or you want to try to control it but it does seem like it's worth knowing that and looking out for the right signals rather than being blind to it there's is i'm not religious but i grew up going to catholic school and you gotta read the bible a lot and there's this biblical story where it's like someone's by a volcano or something or i forget what it is but if there's like a loud like earthquake or like a natural disaster and then they're told like you have to listen to god what god's telling you and they're like well i hear this really loud noise but it doesn't like i don't hear like a person talking to me and they're like even when things are really loud the whisper or the god talking to you it's gonna sound very faint and a whisper and that's the challenge is you have to like you know like really pay attention where there's a lot of out loud noise because the most important stuff is just gonna be a really faint whisper and you have to like try and hear it and i don't really care about the message when it comes to god on that one but i do think that like one that's what this thing is because it's like that that whatever you're being told what to do or you feel compelled to it's a lot of times it's not a yell it's like this really small whisper that you have to like and that's like quite challenging it's it's really hard to try and listen to like where you're being drawn to you know like or where your energy is pulling you to it's not a push it's a very very very small like faint nudge right yeah and there might be false positives along the way and it's only obvious in hindsight like when i was thinking about that like what was i doing when i was twelve because i wasn't and i used to actually be like kinda insecure about this i was like i wasn't really sell and lemonade as a kid and you know flipping in cds and and and sneakers and whatever like the the pattern i see now that i invest in a lot of founders i'm like i didn't really have that like the light bulb didn't come on for me at least in terms of like trying to do business until i was you know twenty one and frankly like i don't think i'm the best entrepreneur ceo anyway so like maybe that's that's true that that was the signal but there were a couple of couple of signs that i when i did think back and i actually like took more time to think about was hell was i doing back then what was i really into in a way that like or what was i naturally pretty good at that i didn't maybe pay as much attention to but now i can think about it and the two that came to mind was i randomly like entered like improv class and improv competition when i was like in sixth or seventh grade and we like made it to like the texas state finals or whatever were for like what we were it was like a duo improv which like that's what this is this is duo improv me and you do twice a week and like if that actually did come pretty easily i did have a lot of fun doing it i didn't triple down into it because i you know whatever life happened my parents didn't it didn't help me and i didn't know to ask for it but like maybe there was a signal there of like hey you kinda like this making things up thinking on your feet ripping off a partner if there was another way to do that what would that look like and you know i don't think i could have predicted podcasting but it does make a little bit now that i podcast the day and someone asked about you and i was like in another lifetime or maybe even this lifetime sean's gonna be a either like a comedian or something in show business so that yeah i i was in a movie or two when was like a a little like in six same same era six seventh eighth grade something like that and then the other one i noticed was i love video games which is pretty common you know boys love video games but the way i played video games was a little bit weird and so if i said what was let's pay attention to the weird you know i used to play madden in our nba two 2k but i would basically never play the games i would only do franchise mode which is where you're the general manager you're building the team drafting the players you're basically making bets to invest essentially like scouting investing simulating to see the result and i would just simulate like decades in these games without ever playing the actual game and my sister would make fun of like are you ever gonna play this game like what is this like fantasy roster you're building but yeah i don't know i think i think it's interesting to go look back i i'm not sure again how much of it is like forced narrative versus reality but maybe there's something too to have i've i've now heard this enough times where i kinda gotta take it somewhat seriously and i think it is important because it's like when you are screwing a screw into the wall or whatever and if you start out crooked right if you're at the wrong angle no matter really how hard you push you it's just constant for right you're just like breaking the wall breaking the screw and breaking your own wrist trying to make it go in and then if you get things like aligned right it's like oh just you know force spins to the right click and i feel like a lot of my life was pushing screws into walls at the wrong angles you know trying stupid projects trying things that weren't really in my nature trying to be somebody who i wasn't and man life got a lot easier and it got a lot more successful when i sort of figured out like oh what do i actually like naturally pretty inclined to doing what do you think you've figured it out yeah i think like what we do is like probably the closest approximation to it like if i look at what i do today i get to nerd out on topics which has always been something that i would do like i would always go down these like rabbit holes and then this kinda do improv type of like being able to r on topics and being generative with ideas has always been good and then the other side of it is investing i don't wanna like play the game but i like being the gm i like being the the sort of the the the franchise mode of doing this and so i've had way more success you know investing we're even inc innovating companies with other ceos as operators now right like i thing in our portfolio is probably like forget like angel investing just like in the companies we own a big chunk of it's like four companies or so where there's four ceos and i don't do any of the day to day work and it's performing so much better than you know back when i used to do my own startup and i was all in on it right so is a better fit for me to do that i didn't know you had four you're doing sure that you don't even talk about well i wanna talk about some of them soon and hopefully i will have some news sometime in the next few months that i could i can come on in and and and maybe start to tell these stories alright let's take a quick break and i got a question for you when a buyer asks ai for a solution like yours does your business come up most companies have no idea by the time they found out they've already lost the deal to another company that did hubspot has ae o which helps you show up in the moments when drag buyers are looking for a company like yours before the first click before they fill in the form that is the moment hubspot ae is built for check out hubspot dot com the agent customer platform for growing businesses what did you think of austin austin is a funny place funny place i went to my like hotel room and i walked in and housekeeping was in there but i was surprised and i came out and i told ben i go y'all got white house keepers here i had a white a house that my wife hired and i was like i bet you she's gonna be a drug addict and i was right she was a drug addict i don't hire these guys anymore it's like there's this great stand up bit where i forgot who was like a az z's or there was hudson i who was like an indian comic was talking about like how they made it and they were like i'm a gonna go adopt a white baby like just bring a white baby like events and like stunt on people because it's like yeah i i i adopted a white child so i don't know austin's it's a fun place i is i mean one interesting thing is because we're i mean it you know it in austin which is much more populated city and we were just sitting like in a coffee shop basically working all the time so many people came up that love the podcast that was it's crazy right and then they would tell me their story right and it's like wow and so you you know it's almost like you get lot of ideas for the podcast just talk to these people like this guy came up and he's like i'm all in on social selling social commerce i know there's two words apart what like what does it together what is what does that mean and he's basically like you know you know people who are making you know hundreds of thousands if not millions of dollars just making tiktok videos for products and they're just getting affiliate fees just making content and they're not influencers they're not famous people but they make like the best way to sell this soap this teeth white earth this you know these leggings this hoodie and that they're generating you know forty thousand a month hundred thousand a month you know two hundred thousand month four hundred thousand a month what platforms on tiktok and whatnot so like there's the lot there's like live selling that's like whatnot and and tiktok and then there's like just short form video i i mean i'm not i wasn't like unfamiliar about this concept we use it in our e commerce brand but it's amazing just to hear the individual person story it's like yeah she worked at this like hair salon and then she just took the product from the hair salon and started talking about it on tiktok she doesn't have a following but the way tiktok works is any video you know it it's like america's funniest in some videos any eve any video gets to have its you know it's day on the for you page and she realized like wow if i just get good at kind of like authentically and i use quotes because it's like obviously not authentic but like they tend they don't look dressed up they're not in a fancy place they're in their bedroom they look like they're just talking informally to you like hey y'all i just wanna tell you about oh my god this or like whatever this thing is and they're just making a killing on it and so know this guy was like trying to build the the agency around it and the podcast around it what's an example product soaps you said just anything anything dude i don't know you see you are you like are you tapped into this like wave of on no so i don't i i i don't have a tiktok and i've seen not but i i buy a ton of self h ebay so like i know about like buying you stuff i'm not stupid and so i don't know what you're talking i reads it's part of the ebay trend right like this is all new shit ebay this just an ebay what i mean is social comment like it's all like a new products it's not like they're it's just commission based like they're selling someone else's stuff and they're getting an affiliate fee they're not selling like without permission so it's not like they needed to cut a brand deal right got it you just grab the product from the shop and then you sell it and then brand starts and then brands can see if you move product right you move weight on your corner and then they start sending you free shit to try their stuff and then you could that you could try to sell their stuff and if it works it works right like and if your video is good then the brand puts ads behind it so like there was a good really good podcast by our buddy sean frank i think their podcast called the operators podcast like i get e commerce specific podcast he did one with the ceo of comfort have you heard m f rt i see that guy and i see this other guy named greg gl who started a think called bloom which i think is energy drinks but i've seeing these guys all over the place and they're using phrases that i've never heard before like i knew what u was but like they're using it in way different phrasing and they're also like implying that they have like tens of thousands of people making this content on their behalf and this is a totally foreign concept to me and so this company comfort as far as i could tell the total outsider went from something like zero do five hundred million dollars year in revenue in like five years and i went to their website it's just like a fleece hoodie i think right yeah super basic hoodie but yeah so so they're they're a good example of this how big did they get to so the the model is this the model is you have a product the old way of selling it was of the old way as in the of the last ten years was you run facebook ads and you're run google ads and for both of those ads you your team makes the content you typically will have a ad creative team in house one two ten fifteen people their job is to come up with concepts they do photo shoots that do scripts they do static images give it to the designer the editor you bank it you run it you see what works you're putting pay ads that's what's been working well there was a new game in town and if you remember i kinda hinted at this maybe a a year or two ago where i said i invested in this company and it's gone zero to thirty million in revenue in like few months it was like can you say what it was i can't i don't wanna say the exact rent so the the brand blew up it was in a bad way not the good blow up it was a supplement brand it was crushing it the product was all fine but they got banned off of amazon because they were like like manipulating like reviews of other companies or stuff like that like of other brands or something and so amazon was like oh you guys were the ones who wrote a bad review about them boom shut down out down they're doing they weren't playing by the rules ruin the company but i and i i think i even told you at the time i go i this is growing faster than any e commerce brand i've ever seen and you know zero to thirty million in in a couple of months and and i i think i told you i was like i hope i can come on in a year or two and say the the playbook that they use well the playbook is is more or less out now now two years later which is that what e commerce brands do is you basically gift or you know called seating you see your product out to not one not ten not even a hundred but maybe thousand creators that are out there and these creators are everyday people non famous people so not not influencer not micro influencer not influencer person with time on their hands who has been on tiktok and reels enough to know what type of content could work and those people will make sometimes just like you know one video but what it what ends up happening is that they realize oh i should just make thirty four thirty to forty videos a month i should make a video every day and i'll have multiple accounts and i'll post it now you know and so they basically rapidly test content and so now you've got instead of having a in house team of a couple people doing ten to twenty creative assets a month and usually just thinking inside the box because it's like this is my job this is what i i work at the company we have a way of doing things you're just letting the market the letting the crowd figure this out you're crowds your creative and that's you you see means user generate content so you're getting in a given month three thousand five thousand different pieces of content that go out there most of which get absolutely no views but a few of which pop off and then and then all of them look at you then you tell all the creators who are like you know on board do you say look at those works best yeah this worked and then they all start to remix and then the the hive mind gets smarter every single month and they keep trying to do it they keep trying to throw one up themselves and brands like goalie goalie is a a a gummy like vitamin brand i don't know if you've seen their like the commission structure for this they they started out with apple cider vinegar gum and grew it to like it whatever hundred million or something in revenue in very short order what and then they got slapped on the road and they count tanked and they're coming back whatever but like point is they were pretty aggressive on this model so what they were doing was as they found good creators who were good at making this content they started incentivizing them more than the commission so there's a default like commission on these platforms right fifteen percent twenty percent you said your committed what's the platform tiktok tiktok shop also so so so you find all your influencers on tiktok usually yeah wow and and so you what you do is you go to those take tiktok influencers oh yeah sorry non info just take tiktok creators and they get they get a commission so i again just to describe the system it's crowds sourced it's way higher volume so you're talking about thousands of pieces of content a month instead of you know maybe a hundred you don't control it you don't operate it in many cases you never even met them they just pull pull your product and your shop listing and they just decide you just say i'm if you're an affiliate use this use this tag so that you get paid if you sell product right that's the core idea now what happens is on top of that goalie started going crazy so they were like you if you do ten thousand dollars you get fifteen percent commission if you do hundred thousand dollars you get you know trip to miami you do a million dollars you get a million dollars in a month you get this condo in miami you get this lamb lamborghini they started giving away crazy shit i'm making up the tiers right the the math made sense for them but they have this like well i have this like one sheet that goalie was giving creators and like the top thing was a condo in miami the next thing was a lamb and then the it goes all the way down to just like you get like a bracelet you know like you go to check e cheese and there's the prize wall and like you know you end up with the shitty rubber frog but like up there he's like you know the nerf blaster and there this is basically the model that they were doing and so there's been several brands that i mean several hundreds of brands that have aggressively used this strategy and yeah it works works very well what i'm looking at i just googled it it said that they went from zero to four million dollars a month and thirty days oh they got way higher than four million a month they maybe they did thirty days but they went way way past that okay so let me ask you a bunch of questions this is so fascinating to me one is this stuff profitable so a company like that like that got hell big so four times twelve is thirty six millions they they're they were at least doing thirty six million a month they were probably doing hundreds of millions a month if you're doing that amount of money are you actually creating a valuable company well you asked two different questions is it profitable and is it a value valuable company should i say profitable i'm gonna say cash flow positive should be profitable here's just basic math let's say you're giving a twenty percent commission so a way to think about that is you out no cash upfront k so no ad spend this is they take the risk of making the content if they sell then you pay so you pay out of the revenue not upfront the way that normal ads work right i go to facebook puts pit ten grand and i have no guarantee i get anything out so with this i only pay when they sell i pay a fixed percentage of the revenue that they sold for so let's say it's twenty percent well that means my marketing spend is twenty percent of revenue now a normal e commerce brand is spending somewhere twenty to fifty percent depending on their level of aggression what phase of the business that they're in etcetera etcetera usually at the beginning they'll run forty percent fifty percent aggressively to go get a big customer base and then those customers hopefully will repeat by and that's where the profits come from those customers and then you know over time your ad spend as a percentage of revenue shrinks because you have all this returning revenue coming in but at the beginning of no returning revenue so it's it's it starts out pretty high so is it profitable yeah it should be profitable i mean it doesn't take a lot of in it doesn't take a lot to make something unprofitable so so but but you should be able to do this profit now are these companies valuable that's a additional one when we say profit i'm actually saying like can the owner pay themselves a huge sum if you're making yet yes but it depends on when you at where where you are in your life cycle you're one no year two maybe also no but also could be yes if you just decide to grow slower right so it's like up to you how much you wanna prioritize taking market land and like going for the opportunity because sean frank well we'll always we say like you could have a business he's put the numbers there i forget exactly what he said but it was something like hundred million dollars a year and like the two owners can are barely drawing seven figures a year e commerce is like saying is like startups where the spectrum of outcomes ranges from everything to you know you can go from loser your shirt to oh my god this person is rolling in profit i know people on all ends of that spectrum there's excellence how are you're gonna run and so there's no like rule what i'm saying though is that in some cases it's like well let's take startups for example startups you're fighting gravity almost every start of fails even the ones by smart people even the ones by smart people who work hard who are like doing you know all the best practices of management right they'll still probably fail because building a billion dollar startup which is usually a novel idea or disruptive company like the the venture startup game i'm not talking about like person who starts a barber i'm talking about venture startups it's such a hard game the gravity is that you're gonna fail e commerce is not like that e commerce is the gravity is you should you should be able to succeed if you were you know smart and hard working and so same thing here now are these companies valuable no not really because values is typically based on def and a buyer of this business doesn't know how long this channel this tactic is gonna last and if this is what's driving all your growth then you're gonna trade at a much lower multiple this is for the folks out there who have a business that does at least three million dollars a year in revenue because around this point that's when you're able to look up after being heads down for years building your company and you realize two things one you've done something great but just do a long way from your final destination and two you look around and you realize i am all alone i've out run my peers which means you're now making ten million dollar decisions alone by yourself and that is when mediocrity can creep in my company hampton we solve this problem by getting a room of vetted peers of other entrepreneurs who are gonna hold you accountable call you out on your nonsense and help show you the way because the fact is is that there's only tiny number of people in your town who know what you're going through and who have been there and they're hard to find and if you can find them it's hard to have this explicit time this explicit place where you sit down where the rules are clear that we are here to help each other and into be one another's board of directors the biggest risk is not failing you have a company and it's working you're gonna be fine but the biggest risk is waking up ten years from now and saying shit i barely grew in business and in life and for people like you who are ambitious wasted potential and regret is what we want to help you to avoid we have made so many of these groups and we have a thousand plus members and i know this stuff actually works whether you work with hampton or you get your own group on your own but having a group like this of group of people who meet with in real life once a month it can change your life the change mind and i know it will change yours so check it out join hampton dot com it seems like you could start off being a nobody company and you sort of have a git rich mentality i do think you can it's better to start off like thinking my brand should be amazing my product should be amazing and that's how i should grow and i add ads and all these tactics on top of it but it's i i think that some companies do start off doing these like stupid things early on and they and they swapped they they can switch like i don't know what anything about ridge but like there's a world where this was like a silly dumb thing and then he switched it i'm just hypothetically making this up it could have switched to like oh this actually product is good and we are gonna invest in our brand i mean have you seen like original athletic have you seen the original athletic greens no was it lame this is you know one of the early days landing pages of athletic greens but i mean it's like this is one yeah each body ml info right dude with six pack girl eyeing him all your vital nutrition in thirty seconds less money back guarantee hundred percent satisfaction limited time offer act now giant orange arrow rush my order is the name of the button for buying it the world's number one super food cocktail anti antioxidant rich with great sweet taste okay so that's like you know an old version of that that's not even the original version that's the old version right and you go look at it today right if i go to like the a g one website yeah it looks great it looks like you you have hugh jackman drinking from a glass vase his daily you know green nutrients right with clinical trials and you know blah blah like you know who does you knows what if this shit works or up but you know yes you're right like you can absolutely start a little jan a little move fast and break things a little little you know fake could till you make it and then you can adapt and you could like you know go go go more and more legit over time you can improve your formula you can improve your packaging if you improve to your sales method you can get off one hack sales tactic and get more diversified right like go from there i mean boys who did native i think he's one of the best examples of this i think he's told all this publicly so i i was like we're saying anything that's out of school here here's here's the timeline that i love mo is sitting next to you in a c working space and he's at some point had this idea of he looked at etsy and saw that the number one selling product on there was a natural deodorant i realize oh wow that's market validation cool like that contacts a woman on there says hey can i take your natural deodorant can i put my label on there you know goes outside the office there's like it was like it was like homemade it was like homemade ammo i or i i forget the drug or the chemical something free you know pair pair what's it called para and aluminum para aluminum free or whatever and he and it was like a mom and pop thing and he was like let's commercial this yeah so he was like i'm gonna put my label on it we've both seen right outside where you guys worked there was a restaurant or something called native that looked exactly the same with the exact same logo somehow that ended up to being his name and his logo you know he grew the thing with cheap facebook ads and grew it like crazy and was like fit packing orders himself on the kitchen table but when she was like dude i can't make like ten thousand bars of deodorant and in my bathtub anymore he's like okay like can i buy the formula of you and i'll move to like another person and figure that out he used to put deodorant in on his arm pitch run around the block come two two different sticks two different formulas run around the block have his brother smell each one and be like which one's better and like that was his like in the clinical trial that he was running and so you know like you do what you gotta do is somebody asked him i early on like he told the story where somebody said like you're starting to a deodorant company like moist you don't know anything about deodorant and you goes today i know nothing about deodorant but in six months i'll know everything there is to know about deodorant and that was true and like y ends up selling the company for a hundred million dollars to pro and gamble and now it's in target it's like the best selling things multi billion dollar company type billions in revenue right like unbelievable unbelievable like sort of story right and there's a even better part where pro gamble or someone was in the meeting to buy the company and he was like how do you expand he's like well can you put the native logo on a shampoo bottle and they go yeah i go okay that's what you do alright i think you guys should printed on toothpaste alright yeah fine by the way there's not there's another good you people should go back and listen that he he was like in the first twenty episodes of this podcast i'm shocked that he says some of the stuff he says mo is very good with words oh he's super entertaining he tells a story of how when they were trying to sell they didn't own the trademark for native and he's like shit pro gamble was not gonna buy this i don't have the trademark for my like consumer you know good that's gonna be on the shelf of target someday and so somebody was squat on it and the negotiation story of getting that trademark was great like there's just so many great stories in the in in the the formation of native a lot of people don't realize this but mo now that i think about it it is so mo used to have a company called cask or cask which did you know about this was like a spirit brand but i actually know what wasn't it was it actually a liquor or was it a d to c shop what was it was basically like they would get rare whiskey and i think wines that only had limited runs and they would do drops so it was sort of like this was like during the guilt group or guilt craze where it was like you know crazy good deals but right you only have a limited amount of time to buy it so i think it was basically like a email list of like wine and alcohol buyers of who like rare stuff and they would would broker deals where they would you know send out an email an email drop of like a rare whiskey and he sold it he sold it for i forget how much but he he you know changed his life at the age of thirty but he's has this cool blog post that interestingly it's actually on the hustle my old website but it used to be on medium but the first listen to the first few sentences the hair of a dog is a sports bar located lower east side manhattan like like most sports bars in new york it has an un angola number of televisions a beer pong table and three point five stars on yelp more importantly though hair of the dog has a single dollar price rating which is really important when your goal is to be drunk by three pm it was october two thousand and thirteen my cofounder founder and i were in negotiations to sell caster in the commerce site we found with just one and a half years ago that sold spirits meaning booze not ghosts online negotiations had already dragged on for a few months and we were days away from our scheduled closing date and then he goes on to like explain the story of how he sold but isn't that a beautiful like first couple sentences awesome and then he like tells he like gives five lessons about his starting casket he called it birch box for men if you ever heard of that but he's like says beef frugal be relentless and then he says be experimental be careful and he gives like all these cool tidbits about it last question can this work for b b products why don't why do people only do this for consumers i think i think one of the great arbitrage that b b businesses don't do the proven tactics of b companies so b companies are out there fighting for their lives with customers and marketing to try to build their brand and b b companies if they simply borrowed the playbook from b not everything would work but way more would work than doesn't work and it's i think it's woe under used and usually the skill sets a lot of people who are in b don't know this because they don't come from that world people in consumer tend to stay in consumer or they go to they go to b to b and they are so guard they only bring over like a portion of it but i i think i think a lot more of it would work this should not to be pretty cool we were supposed to have a guest on this is a little behind the scenes they're supposed to have a guest on something happened to last minute and here we are and it turned out to be quite fun that whole thing was live and improvise unprepared here we go alright that's it that's a pop i feel like i could rule where i know i could be what i want to put at all in it like a days off on a goal less travel have a look hey let's take a quick i wanna tell you about a podcast that you could check out it is called the science of scaling by mark robe he was the founding ceo of hubspot and he's a guest lecturer at harvard business school the guy smart and he sits down every week with different sales leaders from cool companies like cla y and van and open ai and he's asking about their strategies their tactics and how they're growing their companies as you know head of sales or chief revenue officer if you're a looking at to scale the company if you're a cro or head of sales just look at to level up in your career i think a podcast like this could be great for you listen to the science of scaling wherever you get your podcast