When everything works, you learn the wrong lessons

alright look on youtube everybody talks about how they're crushing it every business podcast of your business influencers 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 it to this steps episode so he's talking about how he made the biggest acquisition of his life when he bought somewhere dot 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 know nick he's he's he's a popular guy online but you don't always get to see the the humble side and so i think it's a great episode with nick enjoy i feel like i could rule the world i know i could be what i want to from at all in in like a days off on roll alright what's up we got nick hub here friend of the pod nick what's up man sean thanks for having me been a long time did you you wrote something so we have every guest do a little prep doc of like hey what do what are some things on your mind stories ideas that you wanna share and you wrote ones that i think is very interesting to people who've been following nick hub so you built up this personality online of being confident borderline cocky you 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 have been humbled off my cocky attitude in my thirties is this a do we have a heel what's the a 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 i felt like i knew everything man like and 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 and me meet me putting myself out there but yeah man like you just realized that business is hard business is really hard so it's not the same as it was two thousand twenty four thousand twenty five or not the same as two thousand twenty two two thousand two thousand twenty three for any entrepreneur i know so get get 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 gonna talk about is like back in twenty twenty twenty twenty one twenty nineteen like during that era it felt like you could do no wrong but like give me nick back then he was thinking x y z about himself for 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 started ten plus companies over a three year period might four four of them have been shut down so yeah it's a not all roses is not all roses but you are you know i guess older and wiser are now and you've it's sure something shut down but other things you've sort of doubled down on and started to work what do you think caused that was it just market kicking your ass a little bit in certain areas that that sort of made you reassess were you wrong about a specific thing i thought with a personal brand that's strong enough you could get it an agency business of any kind and go to the moon whether or not you do a couple things right couple things wrong whatever sort and then yeah the algorithm changed like the business got a little harder people started really watching how they're spending money so i just think it it's harder now than it was man like oh i know a lot of people who are making less money now than they were three years ago right right okay i wanna jump around into some of your new ideas so things you're feeling thinking right now so you know you mentioned being sort of humble and you mentioned your portfolio going from how many companies did you have kind of like at your peak and how many do you have eleven yeah i i started eleven companies from you know two thousand sixteen it was my first or you know were like i'm gonna do an seo company i got a storage company i gotta a what else do you have if you had a bunch of others i had a a company paper paper click marketing company called ad rhino at a sales consulting company called hub method i had business brokerage i had you know on and on and on so i went on his phase where i was like i can't i'm i got the hot hand my audience is super powerful like let's scale up some companies do you remember at your peak what the group revenue or of of the companies you owned the majority of group revenue or cash flow was at the at the peak because it it was working for a little while right yeah i 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 to the top so it's kind of like a power law thing right but total of the six bottom ones i mean we're were up to half million dollars a month maybe a total revenue yeah shut down four and two of them are are you know tread water right now right and so that 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 somewhere actually at the time it was called she and people don't know the backstory here so the backstory is marshall who's the founder was the founder of the company owned the majority of the company then me and nick both had a a a good a good chunk but in the minority and marshall calls and he says hey i got an acquisition offer i think i'm gonna take it and i was like oh wow talk me through what is it and he tells us that andrew wilkinson our buddy other other friend of the pod he made an offer by the company for fifty two million dollars and this was great you know this is a company that marshall bootstrap and raise any money so you know potentially big guys but it was a stock based deal and you know marshall was gonna 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 in know a personally i think every entrepreneur can have that where it's like wow facebook wants to buy my company is 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 is very quickly i was like oh but he's actually already decided this was a let me i just wanted to let you know disguised as hey what do you think call but you know i'm i'm a very opinionated to guys so not to be deter 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 person's stock like we should just keep our stock it's growing it's a small company of by nature it's gonna grow much faster than these larger companies and you know that stock might not be that liquid or are you sure this deal you wanna do then call 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 gonna if he just wants to sell maybe we could buy it and originally that was some of the idea and i said look my life will get too crazy complicated i don't wanna do this but you were like i'm gonna do it and so walk that's where that's where the story begins walk me through what hap first of all was that your same history did i'd mess anything up there and was it yeah the forty seven forty seven million dollar valuation the company was three years old and growing really fast about a hundred and fifty employees i was a customer and and then became an investor and had started to build the worldwide 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 wanna selling any this company if anything i want more of this business and this was peak this was also just peak nick hub you know not humble nick cube 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 had any 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 podcast 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 i've done something pretty cool for you they have created the m 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 all you gotta do is click the link in the description below and you can access all the notes and the stuff in the vault we're gonna keep adding to this trying to make it better over time thank you to hubspot this is a very cool way for them to sponsor the podcast but by instead of telling you to go buy their they're actually giving you something instead okay carry on so you decide i'm gonna i tell you hey i think i'm probably not gonna do it but you're like i'm gonna do this anyways yeah i i say you know marshall actually i wanna be the one to buy your company you shouldn't sell to to andrew you should sell to me and his initial reaction is like you and what money you he had he had a lot of questions his job almost hit the floor he's like nick this is insane like you kidding me like this is life changing money you sell fifty one it was a fifty one percent deal because he still needed remember he still needed me and you in because we were sending a lot of business and he still wanted marshall about some skin in the game and yeah man the next three month period i i sold marshall on the fact that i could raise twenty million bucks i negotiate a seller note for a chunk of it had to get very creative with how i structured this deal because i realized real quick that it's not the same as real estate and and how much skin i can get in the game so so let's talk through 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 like an all stock deal all cash deal up upfront earn out contingency based seller finance that you know it's a big there's a big array of different ways that deal can go down so can you just give us the the simple version of like what was originally a forty seven million dollar offer from andrew but the business kept growing over the next six months that we kinda got this deal done it became a fifty two million dollar purchase acquisition price and let me be clear that andrew it was early on it kinda of felt like mean andrew negotiating against each other holy shit i'm negotiating against to tighten this guy's bought forty companies you've bought your publicly traded business you know a billionaire there on paper for a while a great friend of ours and then andrew kinda of just thought about some ai risk he saw maybe some some headwind and he said you know what nick like maybe we'll do this together it was kind a conversation throughout it wasn't as if we're have any an between each other but yeah it was it was i was gonna raise twenty million dollars to buy forty percent of about forty percent the company from marshall i realized that if i go out and raise twenty million dollars to buy this company i'm only entitled to a twenty percent carry on top once everybody gets their money back right so the structure is you go to investors investors give you twenty million your deal with them is i get a twenty percent carry a profit share of of that so like you know you're only owning so the twenty twenty million buys you what what percentage twenty percent so forty whole numbers it's thirty nine point two five for like twenty change but let's say forty percent twenty million dollars i would need to get them all made hold their money back plus a hurdle to then get an eight percent upside which is twenty percent of forty million so my ownership stock would go from about twelve percent to about twenty percent i'd have to raise twenty million bucks i'd put my name on the line i would take all this risk do all this work very quickly i realized like i can't do this deal like it would be foolish for me to do this so i went back to marshall and say hey i to buy more of the company and this is where we kinda got creative and i and i carved out an eighteen percent seller note directly from marshall to me and a seller note is basically the seller saying i will lend you essentially the money to to pay me and you're gonna pay me every year or every quarter whatever you guys decided this so what was that those was eight what eighteen million what did you say how about like about nine million bucks for eighteen percent of the company alright so you you all in you raised twenty million from investors you get nine million nine point something million from marshall so you're in twenty nine million dollars and now you're in charge yeah and you've got peak energy and i'm talking to you and we both are like do dude we've had so many ideas of how we could share this business you know from an to why this is gonna 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 she incorrectly smart people to know that holy cow we cannot grow a big company with this name so we bought somewhere dot com for four hundred thousand dollars shortly after closing change the name from support shepherd dot com to somewhere dot com our seo our search engine optimization and our brand recognition vanished overnight in that one fell swoop we lost three hundred leads a month of a of about a thousand leads that we had so he lose a third of your traffic on your brilliant name change cake next yeah let me 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 five dollars an hour and send you know three thousand website visits in two hundred three hundred four hundred leads to the company to virtually nothing right so my ability to send business to the company with my personal brand vanished 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 years and you guys were pretty loud about the acquisition which also invites competition right you tried telling me over the years by the way i tried telling you this but like you know everybody wanted to to pound their chest natural honestly like i get there's actually an upside to it too right i think the month we announced act to be fair the month the two months after we announced acquisition it was actually peak growth because like a lot of people went and checked it out and realized like wow there's a reason why all these people use the service there's 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 em emboldened the existing competitors to go harder and it yep it created you know ten new competitors let's say yep and and then the economy started shift like interest rates went up a general like silent recession happened in a lot of different industries right and and our customer base our customer base was not super well funded ai companies or something like that where we're you know spending was they're just spending in s money around like we help real business it 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 you don't know what's gonna happen with so you shrink your workforce you we would serve tech companies that were you know more responsible with their cash and so like all these businesses that are are great customers to have in a big part of our audience they are obviously cost sensitive because they live in the real world they're not vc subsidize with you know fifty million dollar rounds where you can just aggressively go higher and spend against macroeconomic headwind yeah eco com eco comm headwind home service headwind construction headwind real estate headwind means lots people are hiring lots people are growing their teams right and i made a lot of bold quick executive changes inside of somewhere when i when i acquired it the company had grown very quickly it was doing ninety five percent of its hiring in the philippines executive assistance right we started to invest in latin america we started invest in south africa finance talent in egypt to building executive teams in south africa performance marketers you know high skilled you know actually had a structure and build a company from the ground up internationally it's an important part i'm i'm making fun of of some of the fun decisions because because there is a happy ending it all works out the company back to growing well all that good stuff it so then it's fun to laugh about mistakes it's it's not so fun when if things go poorly you don't you to laugh about the mistakes as much you cry about yeah we're making it sound like we we're gonna sound like we're gonna end this in bankrupt but no that i guess the spoiler here or you give the spoiler then we'll kinda you know over the last four months if you compare it to before acquisition those four months i was negotiating the deal were up about sixty percent from a revenue perspective and over last year it's twenty eight percent so i'm still behind my like pro form when i hope to do with the company when i bought it but revenue growing very health layered and our team is awesome so i think we're doing a phenomenal job of finding people all over the world i've learned a ton about world worldwide recruiting i wanna give some people some tips to how to do this themselves like what what to look for but yeah it's been a a lot of changes so so the reason i wanted to share this is because ninety nine percent of people talking about their experience is buying and running businesses the selection effect is the people who are failing shut up and the people who are succeeding didn't get real loud and i think what's cool about you is that you you you you can give it and you could take it and so like you are you are bold and you say what you've being you say what you feel you were not you're not afraid to be wrong and if you're wrong you say i was wrong and i really love that about you i really respect that about you i think that's actually quite rare and in this case like you know you're basically saying hey i wouldn't 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 in in sports they call new new owner sort new owner syndrome which is anytime a sports owner buys a team they immediately start changing everything and because they're like oh i could i can do no wrong i know how to fix this i'm gonna do all these great things in your one and one of the things that i think it's actually pretty interesting here is even though we run this global talent company and we were finding talent all over the globe we were mostly finding finding kind of junior and mid level talent so like you know whether it's assistance executive assistance was like a big you know huge part of our business sales folks you know whatever there's folks like that but c suite folks we would typically assume are well that's who i wanna use you know you know different local hires either you know in the same office as me or just american hires expensive big pay packages you know got a lot of pe with companies i recognize recognized you know whatever and so we did that you 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 in mid level but actually the executive team with executive talent elsewhere and i kinda took that and i was i should do that in my businesses because that's actually like an even bigger hack because you you were like dude i'm finding here's this person in south africa they've got an nba i think it would be perfect english they've worked for international companies and you know american companies that i do work internationally for you know twelve years they've been a financial control of 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 hard work hardworking working 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 kinda cult corrected and i don't know if you wanna say a quick thing about that yeah i have six americans at somewhere out of a hundred and sixty employees ari cost another company in my portfolio that's growing really fast hundred and thirty employees seven americans bolt storage six americans out of sixty 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 ra cost johannesburg south africa head a performance marketing in bog colombia you know head of finance an it consultant who got me through soc two compliance we got a certificate this week in cape town south africa so i used to think like okay 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 rather and cheaper over inter internationally and i don't want this to be a summer plug but you you were like dude i tell you how to do this without somewhere how's like go that's like an anti ad so great and you could do somewhere but here's how you do it without us so how do you do it without us so we get we get sixty thousand applicants a month half those are from linkedin and indeed and monster promoted job postings can tell you i'm gonna 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 wanna make your own hire go on linkedin post a job i'd i'd recommend colombia 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 in some other countries but go there promote the job on linkedin with a hundred dollars a day and run it for five days post the job in those countries on linkedin promote it with a hundred dollars a day run it for five days so you're in what for maybe two grand you're gonna get a thousand applicants alright but that's too many how do i filter her yeah so we have figured out and i'm gonna pass this on to you is that of our sixty thousand applicants every single month eighty five percent of them can't type thirty five 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 to executive leadership your your easiest immediate filter is typing speed english test basically yeah we're getting that down we're getting that down to five thousand people a month that are coming into about whatever eighty percent of people right away great what's the next easiest heuristic to find great talent we're gonna send them a request for a one minute video k where they film themselves introducing themselves for one minute eighty percent of people are just not willing to do the work they're not that serious about looking for a job right so the other twenty percent you left with maybe a thousand this is our counsel you know you when with your job post that you got a thousand hopkins occupancy you're left with maybe forty thirty or forty people it can type over thirty thirty five words per minute and have sent you the video you watch the videos you look at the the professional maturity you look at how they communicate which is a big part of the job and you pick your favorite five to hire and then i love assessments if there's 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 to three minute video on how you would you know missed opportunities or how they would improve and that's you know then you're gonna be left with three or four really right candidates and hiring right task based test over interview is huge we do that and and all mention the interview i guess well you add our don't even i don't even get to an interview at this stage this is how we do it when when i do this with with ben and our companies and part of it is actually useful for you so when you sit down you say alright if i was gonna give somebody a test that they could do in something like sixty to ninety minutes mh what would most closely simulate the type of stuff i wanna 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 dirty secret why you make a lot of bad hires 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 them so nice it's like no no we have an objective way to say here's what one person here's what the other person produced and we start with production because that's what we're gonna want in the end is production and we will often i don't i don't know you do this but we will often just pay to like hey i'll pay you for the hour of time two hours time whatever it is like this is a paid task trial because you're actually saving me money and in time of interviewing and get making a false hire because i like to you when it we had a nice chat but he actually weren't good at doing the thing yep because exactly i wanna 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 egypt cairo egypt is the cheapest city in america in the in the world and you can find people who can work magic and microsoft excel and power bi from a finance data analyst 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 if they're not a sales role south america is amazing south africa is a sales and finance hub there's thirty thousand south africans that get on a plane in go america every single year to do audit and tax work for big four consulting firms they go back to south africa african you hire for three grand a month to be a controller at your small business so yes it's just unbelievable areas i love sri lanka as well for almost all roles philippines obviously there's thirty million million filipinos working for american companies today it's just deeply ingrained in their culture so to get people an example of the assessment real quick i just pulled one up so this is what i used to find my assistant so i basically gave this out and i said i said i want you to do the task and i want you to record a loom video explaining what you did in the and as you do task 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 a easy person to communicate with so my assistant task i said pretend your booking a vacation from la to paris from my wife and i our our ideal dates are this but we're flexible on those by a 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 wanna see them put together kind of a menu of options because that's typically how i work with my assistant it's like you get me into ninety percent and then i pick and choose what i want another one i said here's a voice note i put a voice note on sound cloud and i said of me dictating while driving draft these two emails based on what i mentioned and in in that voice note i'm like hey oh i gotta i promised x so and so i would introduce them to so and so you know i met them at launch blah blah blah and then i try to see if they can just quickly g like basically can i write a fuzzy address on an envelope and will it still get there right because i'm not gonna get perfect instructions both of the time so how do they deal with imperfect instructions i'll have them do simple things like hey i've just moved to from texas to wyoming and i don't have i don't have changed my driver's license can you figure out how i need to go like 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 the like make a birthday card in can for my daughter's birthday i wanna like do they have basic design and event organization skills and the last one was like research so it's like hey i'm looking for influencers for this new prop fitness product that i have find me ten fitness influencers i fit 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 that's a one page google doc and they send me basically a loom video of them doing each task and that's how i've quickly filtered through you know fifty people like somewhere basically he was like hey here's fifty people here's the four we'd like best i gave them the assessment i didn't like the first four then then they gave me another batch of four and immediately there was someone who great yeah they they shine the the the the person who's competent will shine to the top of the crowd without any work on your it's a it's a beautiful thing you were basically saying like 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 do you wanna talk about that now or you just wanna talk about like generally how the company well what is it what do what do you have yeah i i in in in advance of this episode i personally vetted and interviewed ten salespeople people in south africa okay ten finance folks in egypt lat and south africa and ten executive assistants in sri lanka lat and south africa gotcha right so you you did a personal vet shortlist list yeah i watched their videos i analyze their resumes what do you want people to email you or how do people get access to that yeah so if they email me nick at sweaty start dot com i can hook them up with some these profiles let them see them and hopefully help them grow their team that's cool i'm curious ben 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 way or somebody who you think is doing cool stuff i i have one person in mind who's building a pest control like monster of a company i don't wanna out him it's just incredible to me you know this you've actually taught me a lot of this stuff is that they find one thing that really works inside their company and they just run the same play for five or ten years to grow a monster business 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 zero one pm right but you do this one thing well and you're the hundred million dollars right today's episode is brought to you by hubspot did you know that most businesses only use twenty percent of their data that's like reading a book but then tearing out four fifth of the pages point is you miss a lot and unless you're using hub spot the customer platform that gives you access to the data you need to grow your business the insights that are trapped in emails call logs transcripts all that unstructured your data makes all the difference because when you know more you grow more and so if you wanna read the whole book instead of just reading part of it visit hubspot dot com have you ever seen peter till taught class at stanford and they put the class notes online and it's been there for a long time it's called the the blake masters notes or something that do you ever read those no what's 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 fay i you know the seed investor in facebook so you if you have some huge winners and they have a bunch of losers what do you notice with them and he's basically he's like one of the biggest poker hotels with the business is when they have seven revenue streams that actually they think they come in and popping their chest being 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 asked ask them how are you gonna get customers or 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 sounds like you know for facebook for example the distribution channel that worked was viral tagging on campuses initially and then eventually off campuses and then the monetization was ads and facebook didn't need to sell stickers that didn't need to do like thousand other things that all the other social networks were actually doing like home m and m's did a homepage takeover and we've signed this deal with this movie studio and they're gonna do like a 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 how he grew united rentals in several of these other companies he ran the same place what was his what was his bla i don't know i'm sure you had several different plays but how you make a few billion dollars is like you find a way to grow you know equipment rental business through is it local ads is it is it outbound sales they were 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 it figure out what companies that play will work for right i i've told the story i think before but i it's it's probably one of my most like i don't know humbling and insightful moments yeah like you a a hard lesson learned very quickly you band aid that got ripped off for me so we have a buddy sue who you know and su like to me my business yoda like if i got a business problem i go to yoda and show he he gives me like he can't even really explain just sort of like he sees through all the noise that i bring him and he just finds the the thing so my commerce business was was early on it was growing and so i think we were at maybe hundred thousand a month in revenue so like you know like kind of like a million dollar thing was like early on and our how did we get there we were doing facebook ads so he told me do facebook ads and focus on facebook ads 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 a hundred k in like three months this is awesome so i go to him and i'm like dude it's working i'm thinking now we should do influencers and we should do we should spin up google because you know of course who doesn't do google but like i really think influencers could work here's this cool influencer idea i have and he who just basically just cut me off and he was just like he's like you wanna win right and i was yeah he's like cool don't say the word influencers until you're at three hundred thousand a month just off of facebook and i was like i was like but would it be bad unless like do both he's like well here's the thing is there any reason you believe that facebook can't get you to three hundred thousand no i've it's got a hundred why couldn't get us to three and he's like and if we couldn't get facebook to three do you think any amount of influencers is gonna save us like no like a successful e com brand should be spending basically one million plus per month and 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 kinda have a broken company if you can't really get there like most e com companies went off of facebook ads so like you should just try to win off facebook ads before you go do all those other shit and he so just and i was like i had expected when i was like gonna get advice from him that he's gonna 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 three hundred thousand a month to your business and just and by the way we kept it going after three hundred we did five hundred after five hundred 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 now five years later we didn't need it you know and 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 it's about saying no to otherwise great ideas one of my companies was making you know spending upwards of a hundred and fifty thousand dollars on paid ads a month we realized that hey our ro as is barely breaking even we calculated it down to the profit and realize that that piece of the company was making us maybe fifteen to twenty thousand dollars 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 you know revenue stream and it said referrals referrals coming in the doors generating two hundred and fifty thousand dollars of profit per month on you know maybe thirty thousand dollars of referral fees and discounts why what would happen if four six months our entire executive team laser focused on growing that referral number and do we think that would we'd be better off than you know maybe the last year and a half we've been trying to get you know slam round peg into a square hole and i think right it's it's unbelievable the job of a ceo sometimes is literally just to tell your team know and to get them focused on what's already working yeah yeah exactly and not hedge like you know i would i would say no then we kinda green light this little test i would say no but then like two weeks later we just do it anyways what happened to our 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 spilling your cake on the floor and it's better to to not do that alright let's take a quick break because i gotta tell you 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 it's got a jan interface it's built like a two thousand and two tax form and it was open only during business hours and i hit send in it froze they flagged the transaction they locked my account they put me on hold for forty five minutes and then they told me i gotta visit my local branch and that was the day i started looking for a new banking 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 two hundred thousand other startup founders and so if you're looking at to level up your banking head to mercury dot com and apply in minutes mercury is a financial technology company not a bank bank the services are provided through choice financial group call them man a and evolve bank trust members fdic you said running a hold coat is overrated i think the trend will die down most rich guys i know are focus on one big business and built it for a long time so hold ko or these portfolios of businesses like you're doing was a very very big idea or popular idea in our circles and our bubble about five years ago and it's not a new idea hold has been around for a long time give me your updated thoughts on hold c man i think over the last three or four years i've been kinda of labeled as one of the hold c guys you know there's several more of us but i've got a lot of people to reach out know i got this plan to you know i'm gonna buy more companies i'm gonna do i'm gonna do i'm gonna grow to five eight ten companies and the synergies and all this stuff i think you really gotta know your shit to run 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 learn 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 in and they pay rent every single month operating companies man you can have massive swings in revenue and profit so yeah i think everybody thinks it's cool another thing about it is you just solve freaking problems all the time like the the biggest problems in each individual company bubble up and come to you so yeah i i don't know if i'm like when i look at some of the wealthiest people i know that some of the wealthiest people that you've had on your pod almost all of them 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 ten alright another one you have here consistency is underrated you're you're on the consistency train what what's your take here yeah i think it's really easy to get excited about something and jump in it'd be delusional 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 cutting calories and super fit it's super clean and super healthy or they're totally falling off the rails and do the opposite while they're focused on something else it's kinda sexy to just jump in and be totally una all obsessed with something the people who win are like even ke kill maybe they're not working seventy eighty hours a week maybe they work fifty hours every single week for their whole career or even twenty thirty forty whatever it is but it's hard it's hard to stay excited about something for a long time without getting burnout out but i think it's a superpower like if you can be even killed in all areas of life i'm not just talking about business but mostly business if you could just keep from gaining weight up the first time can be a lot easier to stay healthy the rest of your life you can just stay focused on one business or 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 how and and and they wouldn't have thought they would get there but how do you get there you get there because you you didn't understand how to have a sustainable burden you had a bon fire and then it goes out yeah you know i used to be in college like a proud pro i would wait till the last minute i'd pull an all night i'd study i'd passed 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 was this thing of like oh when i turn it on i have this crazy intensity nobody can work harder than me for that seventy two hours but then i'm gonna crash and i'm gonna procrastinate it because i know i always have that in the tank and it's the sort of tortoise and hair thing where you just realized that the tortoise is win in life and the tortoise is 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 i used to have of the badge of honor of like how hard they go and how 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 good judgment 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 twenty four years old i remember i slept in the office two hundred and twenty four days out of a year i thought that was me grinding actually was me highlighting to everyone waving the flag saying i'm an idiot i don't i know what to do i'm just here all the time just manic 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'd get done today the one thing i put all my core focus on it and i give myself two hours to focus on 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 today day is gravy i can go play with my kids i can go work out i could do i could do a little more work if i wanted to mh but it doesn't matter because what i realized is the person who wakes up every day three sixty five 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 time frame mh they will crush the average person who simply doesn't even identify the one big thing because you do that three to six five 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 gotta do that like i'm i've been in the weeds in 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 five years six years ten years twenty years right man father time like it's really sexy to build businesses fast and exponential growth and and you hear about all these stories we read about them and and it takes over media especially social media well you you've seen that meme almost at at this point it's not most supposed to be a being but it looks like a meme now it's like fastest company to a hundred 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 then somebody else comes in and says we did it in two minutes we did in two seconds and that's what they're they're all alternatives beat each other to this like sprint to to low quality revenue and i think it's so funny it's like in the big short where he's like or why are they confessing he's like they're not confessing they're 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 q tricks you know we had the founder of culture on and he said he has a huge sign in his home office that just says tune out the noise play the long game and he was like dude for seven years nobody we care but we were doing we were single minded focused on getting a hundred and fifty 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 with stage focus and we just did that for years before we ever got any press any social media any anything and it's like that's who you don't wanna compete against to somebody who could do that because they're building this giant foundation of what they're trying to do does that mean go slow it just means don't get fooled into thinking that you need to you know 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 twelve 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 kinda dream of a world where there's no investors nobody watching growing slowly over time building something sustainable yeah well okay you have some other ones here you said being youtuber is the hardest job in the world i think some like coal miners might disagree but go ahead well i think social media is changing like we can talk about how the x algorithms changed 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 this true i i think there's always exceptions but it's largely true and i've said this before video is the language the the native language of the internet so it's like going into a country if you don't speak video then you were not gonna be able to communicate because that's hot that's what everybody here speaks is video yep short and long form doesn't matter yeah as an entrepreneur i'm i'm really hesitant to get on that hamster wheel because i yes see i see what the life is like of okay you got this bang or video your influence grows gotta follow up the next week you gotta follow up the next week you gotta follow it up next week and you gotta be on and then we go back to that consistency conversation that we just had living that life for ten years living that life for ten 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 a personal brand on all things not video is going down in my opinion alright 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 ninety nine percent wow say some words about that this is just like the internet boom where you know point one percent of the companies we'll survive whatever happens when when the bubble you know changes and we'll we'll go on to change the world over the next twenty 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 of my company's trying to implement ai we're adding tools and i'm just not seeing it sean like ai is unbelievable for you know me having a doctor in my pocket or me doing recipes or my wife you know you know doing little things man like where is the long term value and then when i think about where it's going and i'm seeing my energy bill athens in georgia which is not an energy you know like an area with an energy crisis like some areas of texas and and california my energy bills went up sixty percent in the last three years they've raised it six times wow and that's because what data centers being built or there's double there's thirty data centers that have come online in in georgia in the last four years there's still thirty more in the pipeline being built right now that have negotiated unsustainable 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 cost this is why i think for one percent of people that could get really ugly or for the rest of the people could get really ugly like what about your ability to like run a dishwasher or run an air conditioner or run a heater in your house which all require 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 i'm very bearish on ai right now you said it's bullshit and unsustainable b you said also you said in the next twenty years it's gonna change everything so you it's not that you think the long term is is you're saying that something today is over promise what what is is is it and you're saying personally you're getting value doctor in your pocket recipes life day to day stuff mh it's the business use that you're not seeing the i've added fifteen i've added fifteen ai tools across my portfolio we've canceled thirteen eleven like there's some that i really like the others i'm just like really really hard to justify the cost already and they're and they're subsidized all the way down the chain you know nav video selling the chips they're making the bank but you know amazon cloud services they're subs it all the way down to you know the actual company that's vc backed it's subs the data usage to try to do the land grab so it's gonna get more expensive and i also feel kinda like the electric cars and self driving with elon musk how he's been promising us for twenty years that self driving us five years away it's gonna get harder and harder and harder and harder to continue to improve ai from here and require exponentially more energy so i worry about energy mostly like if if we had nuclear power plants all over the place like i'd 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 like i want full self driving i know how safe it is i'm not willing to drive us sedan because they're not safe so tv dude i bought one i it is the self driving is unbelievable it is so good yeah like i also before i bought this car i also thought like the narrative was elon been promising he hasn't delivered it it might be hard to think maybe you can't even do it without without lidar or whatever and then i buy the car i pushed the button and it drives me everywhere flawlessly you know and i'm like this is here this is already working you know this is incredible and i think the data backs up the personal experience yeah i have i have written in full self driving and it is mind blowing it's mind blowing i want it need it but like is it gonna be widespread as are we gonna have you know robo taxis like san francisco all over the country i still think we're ten years away from it and elon instead it'd be two thousand twelve that we were gonna have this happen yeah yeah he he his timelines have been wrong but i but i think that's more that's less to do now with a tech and more to do with the regulation at this point so i which i think is a is a different different question you mentioned pest control are there other businesses that you've found interesting or like you know you've been surprised at how well they're doing or a niche think you you know you're you're you'd nerd out about a little bit everybody wants to start a marketplace i think maybe i'm i'm five or ten dms a month of somebody saying they found you know there's a kitchen cleaning you know you go you're go at night and spray down hoods and you clean the inside of a kitchen i wanna start a marketplace 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 if it's about a ten thousand square foot warehouse at about seventy grand to do the roof and i'm like that seems high like let's let's do some more work and i found out that i can hire a sub for thirty grand worth of labor and i can buy you know fifteen grand worth of material and i can that's the hard cost to do this job and these roofing companies are making the spread they're making the spread so they literally don't do any work they sell the job they quote the job they carry insurance and then make show up and stand there and watch and make sure the crew does a really good job and make twenty thousand dollars in in a two day job by getting a sub and actually selling job putting their name on it billing the customer collecting the money pay the sub and move on so is that sexy and exciting no but are there rumors run around every town in america making five ten grand a day yes did give you a fun example so at my daughter's school i've gotten to know some of the other parents was like oh cool what do you do one of the guys he does and and i'm so lack of handy that i i don't even really know these terms but he does like framing framing i think is like corporate yeah but you don't like you like you kinda build part of it or whatever you frame the the building that you're gonna build i was like cool so how's it going you know where where's the project have i seen it know what do he's like do hotels have you have you is there one i've stayed in here he's like well i do all my work in alaska i was like alaska and he's basically like again work smarter not harder you know his take was basically look i can be the thousandth best frame in california right now coming in as like a new guy into the space who doesn't have twenty years of referral relationships with all the other contractors and try to scrape and claw do business with expensive labor here in in california and have to and be you know competed down to the bear margin because they can bid it out to thirty guys and whoever comes up with you know the lower price option gonna win he's like but if i go to alaska turns out they just don't really have anybody very many frame like it's easier for me to get on a flight once a month and go to alaska than it is to meet for me to build that business here and it's like i i saw that i was like man there's just like you know mu has this great quote you know the secret to winning in life is his weak competition it's basically like go where there's fish but not other fishermen and it feels like it would feel so foreign to me and most people if you're doing a business to be like well how do i i live here i kinda feel like i should do something about something familiar where i see it it's like we will go into a knowing harder situation because it's more familiar then take on some unknown where there might be a total greenfield opportunity and he's not innovating like it's not like he had to be the do you some new technique in framing or whatever he just went to a place where there's just not a lot of people offering that service yep and i just think like that one principle you know if you're a hardworking person like that one principle can be the difference between again being the thousandth contractor here with razor thin margins and making great margins and having to get on a flight once a month and i just think like i want i i think about a lot of people in my life who there's more people who could benefit from that principle of just go where it's where the where the supply is low or the competition is low because it's unfamiliar for most and you you might prosper we built our first self storage facility six hours from where we were living borrowed borrowed two million dollars from of banks spent three million dollars to build a self storage facility six hours away yeah now i'm in athens georgia which is another different city and people are like oh you you you're in the self storage business like which one in town do you own right i'm like okay they're nowhere near here i'm sorry yeah in storage what was the insight on location for you so did you find like oh this a certain strategy on location worked well for you yeah we didn't even we didn't even talk about real estate it's been a chaotic you know three years in real estate as interest rates have risen and just total carnage in the business luckily we've done some things operationally that you know give us a little bit of advantage but i'm sorry explain why that is so for somebody not in real estate why does interest rates going up create as you said carnage in the real estate market because the biggest line item the biggest expense for real estate investor developer s anybody who buys real estate holds it and tries the cash flow is is debt right so biggest line item we we're gonna borrow anywhere from fifty to seventy percent of value of a building and if you go from paying three and a half percent on that debt you know thirty five grand to service a million dollars in debt to serve to the pants seven percent seventy grand like it's it's imagine if you're labor cost quadrupled in a service business that's essentially what happens in real estate it drives the value what people can afford to pay down so all the buildings that you bought in twenty one twenty two i mean there's guys that are there's guys that are going broke in the real estate business right now in real time that i know it's total carnage because they can't sell their buildings for what they were worth because nobody else can afford to pay that higher i'm amount of debt interest either does that make sense right what's going on with your property now because that was that was the time when you were buying too so yeah we bought a lot and we had some stressed dude like we had some tough conversations we we got out without raising any additional money from our investors and we replaced all of our loans meaning we refinance them and we didn't have to call a single dollar from our investors that's a massive win many people else are calling capital calls or they're actually losing properties we were able to increase revenue quite a bit when we bought a building and we've done things now like we we replaced our inbound sales team with south africans who actually sales trained and our conversion rate went from when we were in the philippines from thirty percent to to forty two percent in south africa so revenues up fifteen percent year over year but yeah man it's it's not easy it's it's brutal is the future for nick hub buying more storage facilities is it just running somewhere and growing that is it something else you know five years from now like do you know what what's the future for nick you know i've i have my my ego has has written a lot of checks over the last five years now i gotta go cash them no i i'm i'm pretty focused on on growing somewhere i wanna grow ari cost and i wanna buy more storage we have a couple deals under contract now the company in a good place and there's just so much less competition in the real estate business right now so it's double edged sword i just think businesses is naturally cyclical it really is like there's really good times and there's harder times and sometimes the hard times are good because you gotta buckle up you gotta operate you gotta make things to make your business more efficient and it washes out the people that can't do that and it becomes less competitive so i'm genuinely excited about the real estate business over time i think we're better than anybody in the world that at finding amazing talent somewhere and yeah so i'm i'm gonna grow some of these companies i wanna grow some of them really large very cool well i appreciate you coming on i always was fun to catch up good deal thanks for having you i feel like got rude to wear i know i could be what i want to from at all in it like a days off on a go travel never looking back alright my friends i have a new podcast for you guys to check out it's called content is profit and it's hosted by luis and ph ka after years of building content teams and frameworks for companies like red bull and orange theory fitness luis and ph are on a mission to bridge the gap between content and revenue in each episode you're gonna hear from top entrepreneurs and creators and you're gonna hear him share their secrets and strategies to turn their content into profit so you can check out content is profit wherever you get your podcast