#07 Why Top 1% of Earners DON'T Stay in their Hometowns (feat. Rob Abasolo and Nathan Barry)
00:00Welcome back. It's Cody Sanchez, and this is the Big Deal podcast for those who don't just want to get rich, but be free and actually do what it takes to get there. So today, we're answering this question. Do you actually have to leave your hometown to become successful? Can you make it where you were born? Or do you have to go somewhere different to grow than the place that you were first made? Lots of people have different takes on this. And we're going to tell you what you need to do if you're going to have to leave. How do you makea successful network somewhere else, and we're going to bring in my rich and successful friendsto tell you both sides of their stories. First, I started with this tweet quite a while ago,and it went something like this. Never be afraid to leave your hometown to grow. It's too easy to stay thesame when the scene does. Your people love you as you are now, and they'll fear losing that you.Your hometown, it'll be there. But if you truly want to change, you need to go to a place thathas changed. And I kind of believed that. But then I tried something else. You did. Like right beforewe hopped on this recording, you tweeted, do you know anyone who is really successful, lives in their
01:12hometown, and has never left to work anywhere else? My favorite tweet was, Jesus couldn't even preachin Nazareth. Jesus was from Nazareth. Fuck, that's good. Yeah. So I was like, oh my gosh,that one's good. And then another person made a great comment. Yep, it helps to be a Silicon Valley local.I feel like the same thing, probably about like New York City.And then another person, no, staying in your hometown will rust you as a ship that doesn't do what it's built for.Oh, that poets in the audience.I know, I know.Still, Nazareth is up there as my number one.
01:47But personally, I would love a hometown.I moved a lot growing up.So I'd love to hear more about what you actually mean first by like success.Yeah.So let's narrow the scope because that's what a bunch of people commented.Let's define success as money and earnings. And let's be really specific. Top 1% earners, which is somewherearound $823,000 a year. Can you be a top 1% earner and stay in your hometown? And what are theexamples of humans who have actually done that? I think having a really specific goal helps you
02:16figure out how to get a really specific answer. So we did a bunch of homework on this, right? And we foundsome fascinating research on the one key determinant that will decide for most young people if they'regoing to be successful or not. And it's fascinated. It's two words. It's called economicinterconnectedness or economic connectedness. And basically what happened is there was a researchstudy done on thousands of kids in neighborhoods that had the same socioeconomic demographics,aka like child A, kind of a same economic background as child B. One child was in Minneapolis,relatively poor, same sort of situation as this other group that was in another city that wasn'tMinneapolis. So same low income children, two different cities. And what was really interesting is the kid
03:03who was in Minneapolis, which is an economically connected city, which means people from high incomes,people from low incomes hang out together. They have interactions together. That kid had a 33% higherincome by the time that kid was 35 than the kid who came from the same economic family,but because the city wasn't economically interconnected, that kid earns 33% less over time.So what does that kind of mean wrapped with a bow on it?That being around rich people seems to help you become more rich.And I'm just using that one example of that kid from Minneapolis, but there's, you know,thousands that were done in this study so that they found it statistically significant,
03:42aka it actually has a strong predictor for most children.And in fact, they said that is the strongest predictor of upward,mobility found to date. Now, they don't say why, but it seems to me like if you're around other richpeople, perhaps you can be what you can see and you cannot be what you cannot see. And then we're like,all right, is this just one study? Because those can be flawed. So we went to another study calledpublic source. And they basically say the same thing a different way, which is the neighborhood orenvironment where you grow up is really going to affect your earnings potentials by and large withoutany other indicators in there. Then in Pittsburgh, adults born and born and
04:21point breeze, just one city, average $70,000 in salary and 78% had a job as compared to Shadyside,which is another segment of Pittsburgh, which had an average income of 22K and employment rate of76K, which basically means if you were born in a low income neighborhood, which we alreadykind of know, that then you are more likely to stay in said low income neighborhood if yourgeography doesn't change. Remember when you guys were in high school and we had those petri dishesand we would like put little different things inside of the petri dish and then they would growdepending on what different things were inserted into the petri dish.And at some point, you know, you'd insert one little piece of bacteria into a petri dish and
05:02all of a sudden mold would grow like crazy.You'd insert something else and there'd be crystals inside of your petri dish.Now you start with the same petri dish and you start with the same base.But depending on what you add, something different grows.And I think that's what this study is telling you, that if you do not add different thingsand you stay in the same place, you largely will stay the same as everybody else.And then there's this other study that talks about the zone of proximal development,which basically is this concept that a learner has one ability without help and another
05:33ability with help if it comes from a more knowledgeable person, which is like, yeah,no shit, Cody.But basically what this means is mentorship and being what you can see is a real thing.We can actually statistically say that if you are around more people that haveX, Y, Z, you are more likely to have XYZ that thing that you are trying to achieve. Paul Graham had a reallyinteresting sort of series of articles that we wrote on. And if you don't know Paul, he was an earlyinvestor in a ton of stuff, Stripe, Airbnb, Amazon, Dropbox. He says, roots grow where planted.Your environment shapes your ambitions. And then he says, great cities attract ambitious people.
06:09So if you want to create, maybe you go to Austin, those are my words. If you want to make money,you go to New York or where Rachel is. If you want to be innovative, you go to SiliconValley. If you want to rage adventure, you go to Silicon Valley. And so what if the reason you don'tachieve, which you want to achieve, is because your surroundings do not allow you to insert differentthings into your petri dish. That's my sort of belief. Now, you had some interesting stuff, I think,from Scott Galloway. Yes. So I know, I know, not a lot of people. I know, actually, I'm not sure,it seems like on my part of the internet, Scott Galloway gets a lot of flack. For those of you don't know,he's made some pretty high profile predictions in the business world.
06:48He made his money by knowing people investing in their companies and advising them.He made a bunch of money.Yes.And he had a really good quote.What does you think?So about outside of this is outside of making money.But I was really interested about like his thoughts on how young people should operate.Basically he said, you should never be at home.
07:05That's what I always tell young people.Home is for seven hours of sleep and that's it.You need to get out of the house.So yeah, basically spending home time, you know, which I'vereally, really like, is inversely correlated with professional and romantic success in his mind.This is obviously controversial for some people because people think that like economic constraints,high housing costs and remote work make staying at home just a more practical choice.So yeah, if you don't want to like leave the house and spend like $8 on a latte and your other
07:36options like stay home and make your coffee and watch a movie, you know, that might be more enjoyablefor some people than going out and about.Dude, I think we got to start, like, also separating what's enjoyable from what will actually get you to your goals faster.And so I think I'm with him.I mean, I remember, like, my first studio that, like, was a little shithole, smelled awful, was on, like, the 31st floor in Chicago when I was working at Goldman.And, and, yeah, like, it wasn't a very nice place.It was cheap.It was what I could afford at the time before that salary kicked in.
08:09The truth of it is, you're definitely not going to have success when you're, you're definitely not going to have success when you're,young, don't know anybody and stay home all the time. Like, isn't that bizarre that that is evencontroversial to say? Like, how are you just going to get handed opportunities if you're hanging outin the house all day when you don't already have a network built in? I think he's just beinghonest. Now, like, I think virtue signallers on the internet kind of, they want to say allthe reasons why you can't be successful because of the things that have happened to you in life.And I just think that's your hero story. You know, the more difficulty you've had, the moreincredible the comeback story is once you overcome it. And so I want to ask you a question on that,
08:45though. So now, like when Scott Galloway was younger, I'm sure there weren't as many people connectingand like making their networking moves on the internet, right? And now people are. And that can bedone in the house. I feel like some people took his thoughts, like to the extreme. Like,you shouldn't try to make your home like a nice place to live as a young person, like just live in ashoebox and leave. And I'm not sure if that's necessarily what he meant, but like I surely like living in aplace that isn't just like a den.Like I did when I first lived in New York.I lived with two guys.
09:13It was a really shitty apartment.But I moved and now I definitely spend more time at home.And I think one thing that allows me to do that is like the ability to network online.I'm not spending all my time at home, but what do you think now about like the changinglandscape of networking?Yeah, that's a good point.I mean, I'm on the internet all the time, right?I have a lot of resources.
09:32I've been pretty lucky in that way as my career has progressed.But when I moved to Austin, it was a lot of.very thoughtful. I moved to Austin because we were growing a media company. I didn't knowanything about media companies. I've been in finance for a long time. I knew about how to buybusinesses, but I didn't know anything about how to grow online. So what did I do? I certainlystarted networking online with other people, but then I became really good friends with like Noah Kaganand Sam Parr and all of these people here locally who were building or had already builtmedia companies. And so I think it's really hard to beat the connection that is looking another human
10:04in the eye, shaking their hand and realizing that you are real in some way, shape, or form.So there's probably a mix between the two. I wouldn't have gotten the opportunity to meet themin person if I hadn't been doing stuff online. So that's your 2.0 version, right? I mean,I do think one generation's like, you have to pick up the phone and call people, you know,or you have to shake their hands in person. And our generation is a mixture of the two.For instance, we hadn't met before this, but we've been working together for a while.But the connection that we're going to have because of you coming here and doing this is goingto trump anybody else that you work with in podcasting that you haven't met in person.
10:36Totally.Because humans are just built that way.But I do think you're right that now more than ever you can network online.That's just devil's advocate too.I like viving in person with people.That's like the whole reason.I live in New York.Like I technically could live anywhere.
10:49Yeah.But the excuse to live in New York is just too high without many people around you.Yeah.But I do think, I mean, give yourself an option of living somewhere that can feel nice but can alsofeel tough.I mean, all of us, millennials, we love a little overpriced house plant. But I do think thatthat ability to be in a place that isn't so great and it pushes you out the door to go do thingsthat make you slightly uncomfortable is something that you won't have to do later in life
11:17if you're successful. But doing it when you're young and resilient is really, really powerful.I want to get into the deal of the week. Yes. So the deal of the week is so cool in my opinion.So I keep talking about New York. Again, one of the reasons why I live there is I'm a horrible driver. I don't know who let me have mylicense. I'm just going to eat it at this point. Everyone makes fun of me. Love living in a walkablearea. And 52% of Americans actually say they want to live in a walkable neighborhood, but only 8%do. And that is where cul-de-sac comes in. So if you're interested in being car-free, but don'twant to live in a major city, you should check them out. Back in 2022, there is a $30 million series A,led by Colsaventures with Founders Fund, Lenox, Buyers Capital, Zig Capital, and Initialized Capital,
12:08investing as well. And the cool thing about them is they're building these like car-free neighborhoods.The first one popped up in Tempe, Arizona. So that's a suburb, right, outside of Phoenix?That's right. And this place, it looks sick, to be honest with you. So there's like little areas you canhang out in. The apartments look pretty nice. They're not that expensive. Rent is around $14 to $3,000.And according to apartment advisor, the average rent in Phoenix, which is the closest city, like I said,was $1,500 in March 2022, with the average rent for studio being $1,200 and all the way up tothree-bedroom being just under $3,000.So like I said, this isn't, this isn't crazy.
12:49This place looks pretty cool.You get a free bike if you go, discounted rides on ride sharing apps and things like that.What are your thoughts on this?It's wild.First of all, I hate the idea of venture capitalists planning and buying my neighborhoods.Have you heard of Blank Street?Blank Street. Oh my, I'm the biggest hater. Only viral tweet I ever had was about, I said,if I hated somebody, I would bring them to Blank Street. If Blank Street's listening to
13:15this, your coffee is so bad. It is a, but yeah, no, I'm with you. So, I don't know. I don'tlove this idea. I mean, these are obviously geniuses. Founders Fund is an incredible fund. So isso is Kossela. But, I mean, $200 million project that is basically a glorified strip centerresidential unit. And the only difference is that there aren't cars. I don't know. Also, why are youpicking Tempe, Arizona? All my Arizonans out there is fucking 400 degrees in this place. Could you imagine,one, you can't leave because you can't drive off. Two, it's 400 degrees. So like walking aroundoutside is not really the deal either. The other part that I don't love about this is, you know,I was like kind of talking with you about who's there. And so they gave a little rundown of some examples.
14:00If I can't leave because it's car-free, and so maybe your cars are parked in a parking lot outside or something, I want to make sure the other residents are like hot, smart, successful, fun.And I'm not sure that I want venture capitalists picking other people in my neighborhood.So mine is like an immediate hater-aid raid over here.But I get the idea.I think we humans, we actually, we want to do this.We want to recreate like small town, Main Street, America, but 21st century version.And so I get this feeling of nostalgia and going home, which is what I think they're going for. And, you know, if you think about it in the future, cars take up so much space. Our neighborhoods are planned around cars, which doesn't make a ton of sense long term. If we can like, you know, rent cars and share them or whatever, that's probably just going to be the next generation. Because I kind of like my own car. I'm not a New Yorker. I want to park in a garage. So we'll see. Maybe your generation will be the one to do this. Well, what I was kind of surprised about. And I know you're on the Hayton VC train right now, but I'm surprised prime time.Ventures, I think prime time partners, actually, it's the name of it. They're a fund. I believe they just
15:04invest into aging communities, right, or aging startups. This would have been a sick place to havefor early retirement. So we know people are living longer, right? But that retirement age,you still see a lot of people retiring around there. But they're not necessarily like what you'dimagine would be in a retirement community. I think this would be a cool place to go if you're in that likemiddle space of retirement, right? So you're not like needing assistance, but like your,your kids and your grandkids would be like, dad, you probably shouldn't have your driver's license.Like, you probably shouldn't be on the road, you know, you're losing it a little bit herewith the driving skills, but like you still have like your great health because science has
15:46pushed us like forward so much. I don't know. Yeah, I agree. I feel like this is a retirement home.I feel like this is, I feel like this is what venture has done since, you know, the last bull runof 2009 in venture is they've been like, the thing is, we're reimagining the way that we live.And what they're doing in actuality is retirement home, but for young people.But it's the same thing.But let's raise $200 million for a glorified apartment complex.I don't know.So I'm a no.
16:14Oh, my gosh.You know what they need to do?Netflix needs to hit me up.You guys should do a dating show.You were saying all the hot and, you know, smart people there.Yeah.A dating show just filmed there.So it's all the residents or have to be a part of it.
16:26So it's like Truman Show style.Like MTV Cribs, dating show.Exactly.Back to my venture.Oh my gosh.MTV Cribs, so they can be like showing off like what they did with this space.I love it.Yeah, it's pretty good marketing.
16:37All right.So maybe there's a way to make money on this idea of never leaving your hometown,never leaving in your house.I guess too soon as hell.We'll see what happens with this community.I wouldn't bet against those guys.They're much smarter than I am at those firms, but probably wouldn't be something I putmy own money in.
16:52So steal my rich friends is where we're going to go next.And as a reminder, we think that the biggest secret to life isn't a hack.It's usually a who, a person.And I didn't have a rich dad.And so I didn't get somebody to mentor me like that early on.And now I have a lot of rich friends and I think we should steal their homework.So that's what we do in this segment.This one was kind of wild because it was really hard to find someone who didn't leave their
17:16hometown but was successful.So we literally scoured the internet.I texted a bunch of friends.You know, my father, who's successful, he left for years.and then he came back to his hometown for decades.My friend Rob, who you're going to hear about next,he left his hometown of Houston, went to L.A., then went back.My friend Nick Huber, who you guys might know on the internet,
17:35so at his startup, he lived in a small town in Indianapolis,but then he went to school at Cornell,then he worked some other places,then he went to a smaller town, but he didn't stay in one.So the moral of story, we literally couldn't find humanswho didn't come from either generational wealthand thus could stay locally and build on itor weren't in like India.
17:55who started something in a small town and grew like crazy, and that's probably just due tomassive demographic shifts and a huge population explosion paired with very few services located locally.Now, this is totally possible to just be a component of bias because we all left and now weknow a lot of people who are nomadic. But I think it's work of asking yourself a question of if thedata, by and large, says that in order to be successful, you need to leave at some point,even if you come back, why fight the trend?And yet so many people don't leave.All right, we've got Rob Ava Solo on.
18:37I'm super excited to have you here.If you guys don't know Rob, he's a stud.He basically came from W2 in the creative world to building a backyard house,tiny home, to then building a ton of tiny homes, normal-sized homes,and becoming a tiny home plus Airbnb sort of expert,then a huge YouTube channel,and now you take investment,and you have all these Airbnbs.
19:03And what I thought was interestingand why I wanted to have you is you have a non-traditional path.You've had a ton of success.And I texted you, and I was like,what do you think?Do you have to leave your hometown to grow or not?And you were like, well, I did.So let's talk about it.
19:17All right.The part I think is interesting is that you were born in Houston,you left Houston, and then you came back to Houston.We want to know, do you have to leave your hometown to grow? What's your two cents?You don't have to leave, but I do think it behooves anyone that wants to experience something different to leave.I mean, honestly, I think the problem with staying in your hometown is that you stay around the set of beliefs that you grew up in.So the things that your parents told you to believe in, the things that your friends peer pressured you into believing, things that you thought you believed, you'll never question that until you are out of that environment.And for me, I think I grew up a very specific way. And then I went to college and I was like, oh,
19:56and I didn't have the comfort of my, I didn't have the fear of changing my beliefs over my backbecause my parents were two and a half hours away. And then I moved to Kansas City after that.Then I moved to Los Angeles. Then I moved to Tennessee. Then I moved back to Los Angeles now toHouston. I've moved. I've moved everywhere. So I feel like every single time I've moved, I've justchanged my beliefs because every time I'm away from the people I'm comfortable in, it allows me to questionwhat I thought I believed. And I think that's super important for anyone wanting to grow.How were you raised? I was raised tradition, like, for the most part, Christian, somewhat religious.My mom made us go. And then that kind of wasn't super forced on us. And then going into middle school
20:38and in high school, I got really close to some friends and they were super involved in their religioninto church. And I, so was I. And that was my identity for a long time. And then when I went to college,you know, I had new friends and I was like, oh, it's interesting being around to other peoplethat think the opposite of me. Yeah. And so what gave you the courage to actually leave first forcollege? Was that hard for you at all? I know like my parents, you're Latino. I'm Latino. My parentsdid not want me to leave. In fact, I didn't leave because I thought I should stay close by. Wasthat at all the same? It was tough because my parents are immigrants and they came to America togive us a better life. And they did, right? Like I was born here. I had an amazing
21:20life from my perspective, right? And so it was really perplexing to my parents the thought that I wantedto go to like the University of Texas and Austin when for them coming to America, anything in America isgreat. And so my dad, I remember him being like, well, son, I know you want that, but the University ofHouston is like 20 minutes from our house. I just can't fathom why you needed another school otherthan that. It's an American university. And so it was really tough because I love my family.We're all very close.It wasn't something that I necessarily wanted.I wasn't like, I got to get out of this place.
21:53But the idea of just something new and scary was just,I don't know why it was appealing to me,but I felt like I had to do it.Do you think that people should push themselves to do that same thing?Absolutely.Yeah, anytime I move to a new city,I try to convince a friend from a different city to move with me.I'm like, you have to do it.
22:11Especially friends that have never moved before.Because I'm like, dude, you're a great person.I'd love to see how you could possibly change.in the best way possible. And so I've gotten, you know, at this point probably two or three friends tocompletely uproop their lives. They've gotten married. They've bought houses. They live these livesthat they never would have possibly had. They stayed in their house and it's just like a reallyinteresting butterfly effect that happens. I think that's ultimately what it comes down to. I'm reallyinterested in the butterfly effect of what happens whenever you just do something that's like so
22:41outside of the timeline that you were destined for. So I don't mean to sound profound, but it is one of thosethings where I was reflecting the other day. I did not get my dream job at Red Bull when I was 21 years old.It was 4,000 applicants. It was down to me and some other guy. And I didn't get the job.And I remember just getting in the car and like about to cry. And my wife was like, it's okay.I was like, no, it's not. Like, this was everything. And it's like crazy. I would have moved toL.A. I never would have had the kids that I had. I would never have gotten the jobs that I'd gotten.I never would have gotten the friends that I've gotten.And it's like, it's all because things sort of work out when you just go out there
23:20do something crazy, I think.Yeah.I mean, we should look up what like the top employees paid at Red Bull because if you look at,let's just say monetary success.If that was your metric, you now make millions of dollars a year.Yep.You have tens and tens of millions of dollars in investment assets.Mm-hmm.
23:37You have probably million cumulative online followers.Mm-hmm.You probably get millions of views a year.probably tens of millions of fuse here across multiple platforms.Keep going.Yeah, what else?Great hairline.Thank you.
23:50Thank you.And if you had stayed at Red Bull, you were probably capped at, like, Max, I bet the CEOof Red Bull maybe makes a couple million dollars, but nobody else that company is makingmore than 500K.And so it's like, if you had never moved, and we just showed the Rob graph in sort ofin Houston at the expected job versus what you've done today, the two graphs would be incrediblydifferent. Yeah, that's what I told my wife. I was working out. This was two nights ago,big revelation. Funny enough. And I was like, you know, if I had gotten that job,
24:21and I was in this job now 12 years or something, I'd probably be making 2 or 300K a year. Andyou'd be making some money. We'd be living a really comfortable life in L.A. But that's it.Like, it would be nothing near what we have today. Yeah. And I think it all, you know,it's interesting, maybe risk compounds. You know, you start out taking the small risk of going to a newcollege. And then you take a bigger risk of going and getting a job in a different city.And then you take a bigger risk of more responsibility until finally you take a risk of yourselfon a business and then you start investing in assets. And the more risk you take,if you're intelligent and you learn from it, the more it compounds into success. At least that's what
25:01it looks like. It's done. That's exactly what it is. I always tell people getting into real estatescale accordingly. So when you're going to get into your first property, you're not going to buy a $3 millionhouse. You're going to buy probably a $200,000 house. After that, you buy a $1,000. After that, youby a 400,000, then an 800, then a 1.2. And so when you get to that final one, everyone in yoursphere, everyone in your influence thinks you're absolutely crazy because they think it's theriskiest thing ever. But to you, it's not all that risky because you've leveled up so manytimes along the way. Yeah. You know, the other thing I was curious about, and I tried to go backand think about it for me, but you've now moved a few times quickly. And one of the reasons people
25:35don't move in any aspect of their lives, why they are static and thus start to atrophy. Um,is because it's scary the future, seeing the unknown.And I think a lot of it is like, well, man, if I move to L.A.,how am I going to have new friends?If I move to L.A., how am I going to have new opportunities?But I actually think there might be the opposite of that.If you stay, breaking the cycle that you already have where you are,is actually quite hard.
26:02It's like living inside of an ice cream shopand all of a sudden realizing you're lactose intolerantand you don't want to eat sweets anymore, hard.But if you just left the ice cream shopand you only went and worked at Whole Foods all day,it's probably much easier to break the cyclebecause you have a lot of other options.But what did you do or what do you do
26:20when you go into a new cityso that you can immediately accelerateboth success, community opportunity?Any lessons there?I really try to plug into extracurricular groups outside of work.I think you can find friends within work.I mean, one of the things I found out very quicklyis everyone just seems to think you're crazy
26:38when you're not doing something that's like conforms to the world, right?So like when I got into Airbnb, all my coworkers were like, dude, you're buying a house.Like you're living in L.A.We can't even afford our rent here.How are you buying a house or how are you getting into Airbnb?And so I naturally found people who were in that space that were crazy too.Because the thing is like, I spent so long trying to convince other people that I wasn't crazy.But now it's like, oh, no, I am.
27:05But it's like I don't want to talk to someone that's not.I want to talk to other people that are crazy.And that's when it really starts compounding in the business.big way because you're like, okay, there are other people like me and they're all like making a ton ofmoney. And so I think it's really like if you want to be, let's say, a real estate millionaire,are you going to hang out with people that are obsessed with, I don't know, their volleyballrec league? Or are you going to be hanging out with people that are obsessed with making milliondollars in real estate? There's nothing wrong with that other group. But if there's something that
27:33you want to do, you have to be in a group of people that want that exact same thing. Otherwise,you will be called crazy, you will think you were crazy, and you will always second-guessyourself. Whereas in the other world, people are just always like, let's go, pat you on the butt.They're like, the hell yeah, let's go. And like, that's ultimately what you want. You wantother people to be crazy. You want to embrace your craziness. Like, that's my whole thing.Are you crazy? We're friends. Like, that's kind of what it is for me these days.Those friends that used to call you freak crazy, how many of them are you still friends with today?One. Yeah, like, yeah, a couple of them. But like,
28:07The one that I'm friends with is, he is like, man, you're crazy.Like, I wish I could, like, that's, dude, I love that about you.Like, there are people that are like, oh, I love that for you.But then there are people that are like, I love that about you.And I wish, I wish I had it in me to be like that.So it's like, there's a fine line, I think.You know what I mean?But yeah, for the most part, I'm not looking to make friends anymore.
28:30You know, like, that was the big change in my life when all this happened was I wanted friendsmy whole life. And now I'm like 33. I've got a YF2 kids. And then I've got my core set of friendsand entrepreneurs. And I'm like, that's it. I'm good. These are the, I've identified the crazy is like,I don't need to make 100 friends anymore because, yeah, I just don't have the time to to always explainmyself to new people. Oh, yeah. I feel like that's the Texas like, bless your heart. Yeah, yeah, yeah.Exactly. When I meet someone like my neighbors and they're like, what do you do? They don't know that I'm aYouTuber. They don't know that I'm a real, I mean, I'll say, oh, I do real estate investments. And if theyreally like, keep clicking in, I'll tell them, but I'm never like, I'm a YouTuber because then they're
29:11going to be like, I did, my neighbor found out because her mom watched my channel in the next weekor two, she came up. She's like, so how's your little channel doing? And I was like, it's not little.It's actually the biggest Airbnb YouTube channel, but it's fine. And I was like, you're, you have a littlechannel. And I'm like, but to her, it's silly. And to me, I'm like, this is, it's an empire lady.You don't know me.I know.I remember when I was leaving one of my companies to do this, they were like, well, just,you know, give us a call back when that little blog doesn't work out.
29:40I was like, first of all, it's a newsletter.It's not a blog.Get your terminology, right, Bub.But I do think, I keep going back to that.If somebody doesn't say you're crazy, you're probably not doing anything very interesting.And so I remember sort of thinking them like little notches I could make, sort of how many peopleare telling me, this is nuts.Why won't this work?
29:57I actually thought about it today because I was at that meetup that you were supposed to be at.And I was explaining this new thing that I want to build that I'll tell you about later,super secret.And there were quite a few people that were like, huh, like, what, why do you boring businesses?What is that laundromats?You know, and they're like, we're building SpaceX.And I'm like, okay, well, there's more than one way to make money.And we don't have to all have venture scale businesses.
30:20But I kind of like learned at some point to flip my mind where I started to think, oh, no,if everybody agrees with me, I'm too late, it's not that interesting.And if a few people say no, that I'm probably in the right spot.Is there anything that you've done when haters kind of come calling that helps you deal with it?Now you're probably really used to it.But I bet young Rob, you know, you kind of take that to heart.It's hard not to when you first start out.I wipe my tears with like $100 bills.
30:45No, I'm just kidding.You know, it is interesting.I was always made fun of for being the cheap guy, the deal guy, the hustler.Not, I wasn't hustling people.I was just always hustling, right?But as an example, I would camp out of like conference rooms at work that were atnoon when they catered food and I'd be like, if I wasn't there, whoever was like sittingnext to that, I'd be like, text me as soon as this meeting led to out, because I'm getting that
31:09sandwich. You know what I mean? So they all made fun of me. They really did. I always got made funof for having new schemes, new deals, new dreams, all that kind of stuff. And coping with it now,I mean, honestly, I think it's just reflecting on like, I am living my dream life. You know what I mean?like I want so much more sometimes and I'm like, dang, man, if I could just go back to likemyself just a year ago or like two years ago, it's like none of this was it was imaginable.And then when I look at the people in my hometown that stayed behind, they're all living perfectlyfine lives, nine to five jobs, but that's it. They're all very comfortable. And I thinkit's very interesting because it goes from people saying like, you're crazy. Well, first,
31:53it's like, you're crazy and then, hey, how's your little thing going?And then, hey, how did you do that? And I'm in that phase now where I get hit up by high schoolfriends, college friends, old coworkers that are like, dude, I love your videos and all this stuff.Or like, hey, can I call you for a second to pick your brain? And I'm like, you never talk to mebefore this. You know what I mean? So I think there's a little bit of relief that it's like,oh, okay. I think others recognizing that, you know, it is crazy. And I succeeded at doing thecrazy thing. And it's like, it's respect. Like, I'm, I'm happy now. I've got respect. And it's like,box checked. I'm good. I don't need anymore. Respect me. No, I'm just kidding. No, it's not really
32:35what it comes down to, but it is nice to know that like, finally, like, I think when your initialsphere of friends and family, when they all recognize it, like in a deep level and they're like,I want to do that. Then I'm like, okay, I've even convinced the haters. Oh, yeah. I mean,my parents to this day sometimes go, do you really own all those businesses? And I'mlike, oh yeah, made it up on the internet. And all these people who work for me, I pay them from,I'm not sure what, my secret only fan's account that has two subscribers. Like, what do you thinkfunded all this? So, yeah, I totally relate. How about, you know, we found this fascinating thing.We tweeted out about, do you have to leave your hometown to grow? Because Rachel and I legitimately
33:14couldn't find anybody who had been hyper successful monetarily, just saying it that way,that had been born, raised, went to college, and stayed for most of their life in their hometown.And we finally found one, who we were going to have on later, Nathan Berry.So we couldn't find any of them.And then I started going back and looking through old friendships and realizing, whoa, it might be one of the biggest unlocks to growth.Because when I look at my friends from high school, those who did not leave to go to college,it's just numerically true that I don't see any of them that, let's say, make.top 1% earnings, even if we define it like that. Do you have people that didn't have family money
33:56and that didn't ever leave that achieved top 1% growth? I don't know anybody. It's anecdotal, right?But I don't know anybody that is top one. I mean, I think I might know a finance guy thatwent to school with me at UT, but that's even breaking the rule a little bit, right? And I thinkhe's probably at this point making $150,000 to $200,000. Great salary. Yeah.Outside of him? Not really.Yeah, it's wild. Not really.I just think in life, like, we look for so many hacks,but there are a few that we know to be really true,
34:29which is if you can get around other rich people,it looks like statistically you have a higher likelihood of becoming rich yourself.And two, it looks like you have a high likelihood of not becoming richif you never leave your hometown, which is wild.Maybe one of the last questions I have for you is, like,you went back to Houston.So you left, and now you're back.Why?
34:49So I started having kids with my wife. And at that point, I felt like my identity was solidified. My beliefs were questions. My beliefs were questioned by me. My beliefs were solidified. I didn't need to explore anything anymore. Like I've explored it. I had moved to five cities by the age of 33. Don't recommend that. But I did it. And I had seen all the viewpoints. I had made friends from all spheres of beliefs and political in there otherwise. I was good. And I had kids. And I had kids.And I went home and I just saw my daughter playing with my niece.And I was like, how can I not, how can I take this away from her?You know what I mean?So my wife and I are like, let's move back to Houston.And my parents live here.My two sisters live here.Has that curbed your growth at all, do you think?
35:36Yeah, for sure.Interesting.Yeah.Like if you would have stayed in L.A.Because L.A. is a mecca of media or even been here in Austin.You might have grown faster.Both your media business and maybe cash.Yeah.
35:49We put an offer in Austin and Houston.And so we were like, whichever one goes forward, we're going to leave it up to fate.And the Houston one went forward.And I was like, great, never looked back.But at the same time, it's like I move there for family.And I do, I mean, I'm still very spread thin, crazy stress.Gray hairs look at them.Like, these weren't here the first time we ever talked.
36:09And, yeah, I mean, at the end of the day, I can't travel like 30 weeks out of the year.Look, I'm no pace Morby.I just, I can't do.I don't know how he does it.It's like crazy.I guess he goes with his family.But because of that, it's like, yeah, I moved to Houston to be close to family.And that's what I do.
36:25So I don't know if I'm ever going to be a billionaire.And I don't know if I want to.But being a deck of millionaires, fine, too.Yeah, 100%.One day.Yeah, I think we're not going to put that out in the universe.You know, we still have that billionaire vibe.It's true.
36:38It's like a fake number, though.I mean, we were at, like, that event I was just at there, like five billionaires there.I'm like, I don't know.We seem kind of the same.Like what?I guess you could buy planes and I can't buy planes.But besides.that. And maybe you could like sway presidential elections. There is that I did say to my wife that
36:54my ultimate goal in life wealth wise is wealthy enough to hop on a PJ every so often. Yeah.With the kids. I don't know if you've ever traveled with children. It's not great. So yes,if I could, I don't even want to go to dinner with other people's children, which would burn me.It's, I don't even go to dinner with my kids. I have a good friend who I invested in his company,shout out Drew. And he's like, he's like, yeah, I got a reservation for five to myall night. I'm like, okay, great. Who are the other, like, three people? And he's like, oh, the kids.I'm like, Drew, I'm busy. You know? Oh, I'm so sorry. Friday night dinner.I was like, I love you, but I don't have children yet. I want to preserve the desire for them
37:34for a little bit longer, you know? Yeah, yeah. But to answer your question, I think moving back to Houston,it did slow things down, but I'm good with it. I'm still sprinting. I'm just not sprinting.Like, if I had I moved to Austin, I felt like I would have been surrounded by so many moreentrepreneurs and people that are out there making that bread every day.But for me, I'm like, I got what I got.I'm going to focus on that and build it to as much as I can close to family.I think that's what's important to me.Yeah, it seems like there's like a life hack from like age 18 to let's call it 35-ish.
38:05If somewhere in there you can move around and get like the fluidity and open the apertureto what's available in life, then you have this long runway.And if you don't do that, it seems you're less monetarily successful.And then at some point, we have a bunch of friends, mutual friends,that are billionaires or are worth hundreds of millions that go back to tiny towns.I mean, Nick Huber, right?Like not a billionaire, but definitely worth a couple tens of millions of bucksand lives in a tiny town now.
38:31And so I think you can return there, but I don't think you can start there.I think at the end of the day, well, first of all, I will say this.I've told you this before.I went to your conference.I spoke at it.I was in the green room.full of millionaires and I think one billionaire. And that was the day,entrepreneurially a lot changed for me that day. Because I was like,
38:53holy crap, like, they're all smart. And I was like,this is the level that you have to be at to like have their six. And so it lit a fireunder my butt to just like continually grind. This was before I moved back to Houston.But this was like, holy crap. Like, if I want to be at this level, I got to operate like theseguys. So I was like, when asking questions. I was like, how do you do it? How do you do it?Wait, you make how much doing who? What? What? You know, like,Think like Justin Donald, for example.I remember talking to him for, you know, an hour and being like, this is crazy.
39:20And then he was never like, okay, guys, I get it.Like, move on.He was like asking me.I was like, whoa, this crazy.It's like this guy, you know, like he doesn't have to talk to me.So at the end of the day, I think there's also like a very giving component to that community as wellthat I think is like super important to find.Whereas I feel like people at the beginning of the grind, they're so competitive.
39:38Like, how one wants to share?It's fight or flight.You know, I get it.And then, you know, what's amazing to me,me is every level of the game where I think I got to figure it out, there's just another unlock.You know, it's like a series of video games where like, I don't know what the video, cool videogames there are all these days. But back in the day, it was like, Zelda. Like, Zelda level one was like,I don't know, pretty chill. And then you get to whatever level and all of a sudden, like, I was never
39:59going to pass it. And I think when I go to a lot of these group events, I'm like, oh, man,I'm still on my way. There's like some sort of fun in that. So I kind of want to start withjust talking about your story. ConvertKit is huge. And, and, you know, and, you know,And maybe you could just give in like 30 seconds the numbers that you tell people now because I know some of that's private, how big it is, kind of brag a little bit about your success.I have a few things that I'll add in too.But tell us first, like you are categorically successful and explain ConvertKit and what you do.And then we'll dive into how.Yeah.
40:36So Converick is an email marketing platform for creators.We're used by everyone from like Tim McGraw and Tim Ferriss to James Clear and Mandy Moore and Susan Kane and all these amazing authors and creators.and Tom Brady powers his site with us, all kinds of fun things.And me.And Cody Sanchez.I'm sorry that I didn't.Right after Tom Brady, really.Okay.
41:02Yeah, that's right.We have 40 million a year in revenue, growing pretty fast, about 25, 30% a year.Let's see, 500,000 free users, 50,000 paying customers.We send 2.5 billion emails on behalf of creators every single month.and a team of 80 people spread all around the world.That's wild.And then in tandem with that, you have some really cool structures that I think, if we think about success, not just unilaterally, monetarily, you have an incredible family.You know, you appear by all means to be, you know, a great husband, dad.
41:37You have a little Airbnb portfolio.You give back to the community.You have a really unique structure where you give profit share to team members.and are very public about how that works.And so it's not just monetarily, but personally,you know, I would consider you somebody that has a lot of the legs of the stool or the table.And what I wanted to have you on this podcast for was, you know,you didn't ever really leave your hometown.
42:03You were born and raised in the same city and even stayed there for college.Can you talk a little bit about that?Yeah.So I grew up in Boise, Idaho, actually about 45 minutes outside of town, up in the mountains.I was homeschooled, graduated super early, went to college when I was 15 at Boise State,dropped out when I was 17, started my first business, I expanded from there.I've traveled a bunch.I think I've probably been to 25, 30 countries somewhere in there.
42:31But I have never been away from Boise for more than six weeks at a time.I've done like five weeks in South Africa, four weeks in Europe, five weeks in Thailand,like some of those things.but it's always been with the home base in Boise.And so now I have a little farm here.And yeah, my wife and three kids.And, you know, we live like 10 minutes from downtown.You know, I'll be on the road tomorrow and all next week.
42:57But it's always back to Boise.So you obviously don't think you need to leave your hometown to grow.You stayed there.Do you think it would have been easier if you had gone to college somewhere else,another big city?Like, were there any detriments to you stay in local for most of your life professionally?You know, it's hard to say I grew up in a time when everything was going online, right? So I graduated high school in 2005. And so that was, felt like the web design community was exploding and you could connect with and learn from so many people. It was really the time that it felt like remote work was starting to be a thing. You know, I was starting to meaningfully be into my career in 2010, 2011. And remote was just starting to be a thing that was companies like, Get High School.and automatic and base camp that we're doing that well.
43:48So I think that I think travel is really, really important.I don't know that you have to live somewhere else.I don't have an opinion on it in the sense of like,it's important to stay in your hometown or it's important to leave.I think it's really nuanced.Like I was jumping ahead in, I was in a hurry to grow up.And so for me at 15 to finish high school and be going to college,that wouldn't really work if I wasn't,
44:14in my hometown, right? And so I jumped my career ahead in a number of years, which required me tostay in my hometown, rather than going to college at 18 years old, 19, and going to an out-of-state school.Yeah, that's a good point. What do you think you'll do with your kids? Do you want your kids to staylocal and build? Do you want them to have those out-of-state experiences? Does it matter?I think they need to have totally different experiences. But how they go about it,there's a huge amount of flexibility in that.So we're at the point,I grew up in a family where money was very, very scarce.
44:50And I learned early on that making money is a skill.And I'm like, okay, I'm going to get as good as possible at this skill,you know, really a combination of a thousand skills.And so in the quest to do that,I learned all kinds of things.But when we got to the point that, you know,now we're making a lot of money and there's no shortage,I was talking to a friend and he was saying,
45:12you know, about this problem.I'm like, okay, we're traveling.Should we book economy or first class?Should we charter a private jet or, you know, some of these things?Four seasons, you know, or the Hilton, right?Where should you stay?And a friend of mine just said to me, it's like, you know, you're worried about the exampleyou're setting for your kids of whether, like, being in the 92nd percentile of wealth
45:35versus the 99th percentile of global wealth.And like, is that enough of a contrast?And what he said is, you should be compared, like, for them,help them compare to the 50th percentile of global wealth.If you want to get them,it's not that by staying at a Motel 6 or a holiday in versus the four seasons,that's what's going to make them grateful for what they have in the world.It's really like get out and show them,
46:02like take them to Thailand,take them to,you know, Mexico and show,like show them all of these places where there's actually really a wealthdiscrepancy.And so I've done that where,you know,one of those trips away is my sister-in-law is the head of education for a medical nonprofit
46:18in Thailand and Myanmar. So I've taken my kids there and they've seen that. I haven't takenthem into the war zone in Myanmar, right? But they've seen a lot of that firsthand. And then we alsosupport an organization called New Story Charity, building homes in Mexico. So I've taken my twoolder boys, you know, down to Mexico City and then out from there to really just show them the restof the world. So I think it's very, very important to get that context and that experience.Yeah. So you give them contrast. Yeah. Basically. And that might, they might get much better contrastbetween Boise and rural Mexico, that, you know, or Boise and rural Thailand. Then they would getbetween Boise and a college experience at Stanford. Right. Like that, you know, it's a different state,
47:05but it's not that different. But you're kind of optimizing for the humility.and humbleness, right, as opposed to, I think a lot of people optimize for opportunity andconnection, right? Like if they go to Stanford, who are they going to know and what opportunities aregoing to have? Do you think about that at all? Like, man, maybe it would have gone faster for me ata convert kit if I had gone to New York and met a bunch of big people that could have invested inme earlier. Or do you not think that way? I don't think that way, but that's probably becauseI didn't grow up in that environment where the country club membership is the thing that got youaccess to whatever else. And I feel like today as a content creator, you have access to so many
47:46people, right? You put out a tweet telling a great story and have a call to action at the end.And all of a sudden, there's 50 people in your inbox that are saying, hey, let's partner onthis thing. And so your work can stand on itself. Now, I think that the connections are so,so important. So I would definitely recommend right in this world, right, of someone starting as acreator or building a startup. Absolutely.go move to wherever the hub of that of your niche is.It could be for three months or it could be, you know, three or five years and try it out.I don't think it's mandatory, but you can accelerate that by really, really a lot.
48:24Yeah, I think that's probably true.Yeah, I've just chosen to do it through travel from my home base rather than, you know, moving for a longer period of time.Well, the other thing is we have some mutual friends like Nick Hoover, for instance, who lives also in a smaller town, not the Boise is that small of a town.But, and basically flies in and flies out to conferences, which is probably the way to hack not living in a big city.And so, you know, you could just fly in and out to convert kits annual conference or to create, cultivate each year, you know, to video con.And by that, have some hand-to-hand connection with people.But for the most part, our generation is mostly online.So you're right.
49:02As long as you create cool stuff, you sort of attract cool people.You can also end up in a trap of having way too many.conversations and not doing enough work.And so you feel like this,you know to be true that relationships and connections are everything.And so I see people get into this mode.They're just, they know everybody.They're always connecting and networking and all of that.
49:25And you're like, but what do you do?What have you done?And what I love is this idea of like being heads down,hermit execute mode and then resurfacing and having a body of work.so that people want to connect with me, right?Because I've built a company to this level.People will want to take my meetings.And then I'm off to Austin, lining a bunch of meetings, having these conversations.
49:50And then I'm back home and I'm working.Whereas I imagine in Austin, you have this problem.I was just with friends in New York who I know have this problem,where someone is always in town perpetually.And so either it's all your entrepreneur friends who maybe have exited or are coasting orwhatever else and they're like, hey, let's just hang out. And you're like, hey, I'm still inlike grind mode. I'm still trying to scale this thing. Or it's everyone who is just in townsaying, hey, can you grab coffee? Can you do this? And Boise is a great place, less so now.
50:22It was a great place to heads down and execute rather than, you know, constantly be pulled intonetworking mode. It's such a good. Yeah, first of all, I hate networking. I think like it's one of myleast favorite activities. But you're right. Like we spend the summer in San Diego for three months eachyear and there's nothing going on there. Like, we don't have really any friends in San Diego,and the whole time all we do is built. And go on walks and think and give a little bit of space.And then when you get back to Austin, there's about 472 activities you could do every singleday. And that works great if you're a venture capitalist and you're just like looking forthe next connect to invest in. But it doesn't work very well if you want to build something
50:59meaning and full. And it requires a lot of your mental focus. So that's a really good point.It's basically like a hermit and then sort of helicopter in and then you helicopter out and go back to hermit land.I have, I'll give you this quick breakdown of the playbook that I have now when I visit a city.So I did this over the last couple weeks in New York and Nashville.I've got New Orleans next week.And basically what we do is I show up and I have, you know, a database of everyone that I want to meet with in that city.And so I'm saying, hey, I'm going to be in town.We'd love to meet up all that.
51:32And then so I'm trying to get a bunch of one-on-one meetings, maybe in aa two-day period, I'll try to have five one-on-one meetings. And that'd be things likeTim McGraw has been a customer for a long time. So when I'm in Nashville, I'm meeting with his headof digital, we're talking about like the next things we're going to do together. Then I've gota series of dinners that I'm hosting. This is all pretty standard. But anyone, I couldn't get one-on-one,or I don't want to dedicate quite that much time to. I'm trying to grab them in a dinnersetting and host something. Then I host a mastermind where I say, for a half day, you know, from1 to 5 p.m. I'm getting 20 creators in a room and I'm going to teach and, you know, share ideas and all
52:11of that. So I can get a bunch of people to that. Then I do a live podcast recording for my show,A billion dollar creator. And we bring in another guest. It's in front of an audience of 100 to 200 people.That's creating content that can be shared everywhere. And then finally, after that, I'm doing a creatormeetup. Right. And so it all builds into itself. We're going one to one, one to several, you know,one to 20 and then one to one to many.And so in a 48-hour period, I can cram in without feeling too overwhelmed.I do like fall asleep on the plane on the way home, you know, but I can fit in really a ton ofintentional connections and facilitate that for other people.
52:51And then I still spend 90% of my time at home in build mode.Visit BetMGM Casino and check out the newest exclusive, the Price is Right Fortune Pick.BetMGM and GameSense remind you to play responsibly.19 plus to wager.Ontario only.Please play responsibly.If you have questions or concerns about your gambling or someone close to you,please contact connects Ontario at 1-866-531-2,600 to speak to an advisor.
53:19Free of charge.BetMGEMGEMS.Petsuant to an operating agreement with Eye Gaming, Ontario.God, that's so good.I love that framework.You need to name that, like, you do, name a bunch of your frameworks.I feel like that would make a really good blog post.And the people was quote, like, oh, yeah, that's Nathan.
53:35I don't know.Yeah, it's, we'll brainstorm.We'll figure it out.Okay, I'll get back to you on that.Let me give us some thought.Yeah, I'd really like the idea of this like layering of humans with intention.A lot of times it's just like whoever do you think of is the person that you reach out with.Tactically, what database do you use?
53:53Does ConvertKit have like a friend CRM?I know there's always so many of these.I always want one.I never like the ones that exist.What do you use technically to actually do that?Yeah, it's not as sexy as I wish it was.I use, so our sales team, I make them track a location for every person they're talking to.Because the number of times you're doing a deal, it's like, yeah, we're back and forth over
54:14Zoom calls and emails for three months.And I'm like, what city are they in?And it's like, San Diego.And it's like, cool, I'm going to happen to be in San Diego in three days.And they're like, really?And he's like, no.I'm just booking a flight because why not?You know, like, I'm going to make that happen.
54:30I've made so many great relationships by just being willing.to jump on a direct flight somewhere and line it up, spend a day doing that.Same thing with closing talent, right?If you're trying to land a new head of ops or sales leaders,and they're like, get on a plane and do that.We track that in our sales CRM.And then for Twitter, I can't remember the name of it,but there is an app that I use that tells me all my top followers by city.
54:54And then it will also tell me top followers by, like I can search bios or anything like that.So I can search for anyone who has newsletter in their bio.in more than 20,000 subscribers or followers on Twitter.And that would, that gives me a list.So like, who are my top followers in Austin or New York?And then also the Converick Database of like, where are our customers?With you in particular, you have all of these framework, speaking of which,that it seems like you use to run your business and your life.
55:23I really like this one.We'll have to name it.But what other ones do you think are relevant to this idea of accelerating your careeror accelerating your business?and the fact that you've done it without being in a massive hub.And having not come from lot, you didn't raise capital for a long time.You built a lot of the business yourself.You kind of did it all the quote-unquote harder way.
55:45So what other frameworks do you think would be relevant to people listening?Yeah, I have this one called the Ladders of Wealth Creation.And it's my attempt at breaking down all the things I observed to be true about making money and building wealth.And then try to explain it systematically.And so basically takes you through these ladders of first trading time for money and then,basically first having a job and then having a services business where you're stilltrading time for money, but you have to learn these new skills.And then productized services and then ultimately into products.
56:15And I try to teach through, basically there's a thousand skills to making money and buildingwealth.And if you try to learn them all at once, you're going to fail.Or it's going to take an absurdly long time without any positive feedback.along the way. Like, it's just going to be depressing. And so instead, if you break it down and you movebetween ladders and you learn, you know, these small skills, right? Like, you and I forget this now.Because we're like, if we said, hey, let's start a new business, form an LLC, done, next,move on. But you don't realize that the first time you form an LLC, that's actually really hard.
56:51Because you just, you don't know what you don't know. And you're like, the Secretary of State andwhat phone number should I put on this? And a registered agent, what is that? You know?That sounds so official.And so you have to learn that.And there's like literally a thousand of these things, you know, how to write copy,how to make a sale on the internet, how to show up and work consistently, all of thosethings.And so if you try to learn them all at once, you'll fail.
57:15And so with the latter's wealth creation, I'm breaking down, here's how throughout yourcareer, you can learn these skills that you need.And I think that can happen, you know, in your hometown.But then also you could say, hey, I'm going to move to Austin because I believe,the next five skills that are most valuable for me to learn are X, Y, and Z, you know, and I thinkAustin is the best city because of these reasons. I'm going to move to New York or L.A. or anywhereelse because I've clearly identified the next skills that I want to learn, and then I'vedecided that this is the best city to learn those skills. It's so good. I love the graphic, too,
57:52of, you know, sort of the time for money portion is two rungs, and then your own servicebusiness is three, and then productized service is four.and selling products is six. And so it kind of talks you through each one. And we were talking,you know, before on this, you obviously obsess on creators and how to help them monetize. And so if we wereto take that really quickly, like getting your first business to a million dollars in revenue,you know, that $83,000 number that everybody wants to hit on a monthly basis in their businesswhen they haven't made a seven-figure business before. How do you think about total revenue numberin your ladders of wealth creation.
58:29Like, do you see creators that have it at each stage of the ladder?Do you think you've got to get to one individual type of ladderbefore you start hitting seven figures?So the very first ladder is trading time for money, right?And so the two wrongs are an hourly job and then a salary.And there are people who make seven figures on a salary.They're the exception, right?But certain doctors, investment bankers, right?
58:55It's, you know, AI, machine learning specialists at the biggest companies, right?I wonder what percentage that is.I think it's very, very minuscule.Yeah, it's going to be low.So as you move along, like, it's very difficult on that ladder.The next one of running your own services business, you know, when you're managing a team doing that work, there are plenty of agency owners that are making a million dollars a year.What the margins are on that.Some agencies are run to fantastic margins, and they're pretty high.
59:24But most agencies, you know, I would guess a traditional agency, they're doing a million dollars a year in revenue.They're probably actually taking home if they're honest with all their expenses, you know, 150, 200,000 maybe.And so I've now seen like agency businesses scale to 30 million, 50 million EBITDA, where they can get truly, truly huge.But generally, some of these things cap out at lower sizes.At each ladder, you get more and more leverage, right? Because time and money and these results getdisconnected. One thing I want to point out is leverage is not good or bad. Everyone talks about it likeit's good. It's not. It is a neutral force. It just magnifies whatever else is happening.Right. So if we go trade a bunch and buy a bunch of stocks on margin, that's leverage. And that could go
01:00:11very well or can go very poorly. And so leverage can also mean that you spend 100 hoursproducing a course, right, for your creators,or your audience, and you sell that and it makes a huge amount of money.It could also mean that you spend 100 hours creating a course and it sells one copyand you made $2 an hour.So you have more opportunity to earn more as leverage increases.But if you try to go for something high leverage early,then the chances of you failing because of some other skill that you didn't learn along
01:00:46the way is pretty high.Yeah, it's true.Yeah, it's interesting. It'd be fun to put some like percentage likelihood to hit. It really depends, too, because if you're an employee making a million dollars a year, you know, you're probably taking home, let's be, let's be thoughtful on taxes and saying 500, 600K a year if you're at the highest tax bracket. But you're definitely not doing that if you are in a business that's only doing a million dollars a year. So big difference between the two. So if you were like, all right, I, Nathan Berry, have talked to thousands of creators, which by now you have.And I have noted these specific things for those who individually take home more than a milliondollars a year. What have you noticed? And like, what would you tell people listening if they wantedto have their first business where they could actually take home a million dollars a year?The first thing is there are far more creators making a million dollars a year today than therewere even three to five years ago. Like, typically.
01:01:42Eight years ago, 10 years ago when I started to convert it, that was a crazy outlier. Now I couldprobably list off 50 or more.I can list off a lot of them.And so first,it's easier than it ever has been before.At the same time,it's one of those things.I said easy.
01:02:00I would say it is simple,but not easy.It is one,like the strategy is fairly straightforward.The amount of work required to make it happen is hard.So first thing is,it's happening more often than ever before.Second,
01:02:12everyone who's doing it is showing up consistentlyfor a very long period of time.And they're not like, yeah, I worked on this every weekend for six months.They're like, no, every single day, you know, I put the kids to bed and I worked on thisin the evenings or I got up earlier, whatever else I did.I structured my life to make this happen.And by a long period of time, I mean, like, show up every day for two years to get likeminimum level of results.
01:02:40And that's kind of where your expectation should be.The next thing is everyone, you have to have an email list.And people think that, like, I think that, like, I think.say that because I have an email marketing company. The answer is the reverse. I have an emailmarketing company because I figured this out and went, this is insane. So I was watching a video theother day from Ali Abdal's manager, right? So the general manager of his business, he was breaking downlike some of all these courses, right? And so they're doing a course launch. And they were talkingabout how yes theory, who has a way bigger channel, let's say 10 times as big, did a course that
01:03:13absolutely flopped. And the difference is that Ollie was with a substantial YouTube channelwas promoting to his email list. He said the YouTube channel is top of funnel. And then aspeople come in and they're following me on Instagram, Twitter, and then ultimately we're bringingthem to email, those are the only people that I'm going to sell a multi-thousand-dollar course to.Right. Whereas the Yes Theory crew with a giant list, they went out and said, we're going to sell thisto everybody. And people are like, what are you doing? We only get content for free. You know,we're annoyed that you even have ads on your channel or like, whatever it is that people on theinternet say. And so when I look across all these businesses, they all have a way, usually email,
01:03:56to push content to their true fans. And if you have those things, then there's a pretty clear pathto a million of year revenue. I totally agree, by the way. Our email list is just like the one thingI would never give up. I would give up a lot of social channels, but I would never give up ouremail list. The other thing I think that I'm sort of noodling on right now because you have this newbillion-dollar creator podcast, right, is just playing the game of what are the levels and what arethe best businesses to play in. And it'd be interesting for you to have a framework on this.I have one we're kind of working on trying to figure out, you know, based on margin andmultiple. So like, what can you sell the business for and how much do you take home every year as a
01:04:34percentage of your total dollars in? Based on those two things on varying types of business.is kind of similar to you, productized business, let's say SaaS, let's say CPG, etc.What are the best ways to play? Because what you've kind of realized is that as a creator,you have a set amount of attention for some period of time. Some people can stretch it longer orshorter. And there are some businesses that have reputational issues if you sell them and somebusinesses that you just don't make any margin on, even though you can sell a lot of them.And so playing the right game is so important, but nobody talks about.that. Everybody's like, I have a business that does 12 million in revenue or 2 million in revenue.
01:05:13And that really means not a lot. And so the real question should be like, you know, what's your,what's your net profit or what's your margin in your business? And what can you sell your business for?Or even better, is your business sellable at all if you're a creator? Do you have thoughts on eitherof those before I let you out of here? Yeah, the first thing is that creators are the best in the worldat capturing attention. And on one hand, they're great at monetizing it, right? We talk about thecreator who makes a million dollars a year. And that's insane, right? They're making more than mostdoctors who went to school for eight years for this one thing and worked their way all the way upthe ladder. And a creator is like, yeah, I've been doing this for three or four years. And there's a
01:05:49million bucks, you know, at a high margin with good tax incentives as a small business center and allthat. But I see audience after audience that is undermonetized, making a million dollars a yearand crazy under monetized. One of my favorite examples is Marksisson, who he had a blogcalled Mark's Daily Apple.It's still around.But in 2014,I think he had about150,000 subscribers
01:06:11on his email list.And I estimatehe was doingbetween one and two milliondollars a year in revenue.So amazing business,wildly successful.And he is monetizing
01:06:21through some digital product sales,advertising,affiliates,that kind of thing.Pretty traditional playbook.And if you think,okay, 100,000 subscribers,$150,000 monetized
01:06:33to a million or $2 million,that's pretty good.But what he ended up doing is saying in his audience, they kept saying to him like, hey, we want paleo-friendly, not just recipes, but we want to buy the products.Like, just let me buy an avocado oil mayonnaise.Like, don't teach me how to make it.And so he ends up starting Primal Kitchen.He builds it, uses the email list to kickstart it and launch all of that.And then in two years, he sells it to Kraft Foods for $200 million, which is mind-blowing on several levels.
01:07:03First, the one to two million dollars a year that he's making, like, that's fantastic.And then he goes and creates a hundred years worth of value or 200 years in two years.Then the other thing is, since I know your audience loves thinking about taxes, he would be payingordinary income on that one to two million dollars a year, long-term capital gains on that200 million.So it's like, wait, you're making 100 as much and you're paying half the taxes.Like, and so when you think, when anytime I see an audience and I see a creator earning a great living, I look at it and I go, okay, what's the thing that they could build that has long-term enterprise value that they could then sell?For me, that's convert it, right?
01:07:48I have an audience teaching designers, content creators, all of that.I'm building a software company that software is valued at great multiples.That's my, you know, billion dollar play.But you see it all across the board.Celebrities are doing it like crazy.creators are doing it. And it's because people are understanding the fundamentals of business now on adifferent level than ever before. Yeah, I totally agree. I think about that a lot too, because a lot ofpeople on the internet actually don't like when people sell info products and courses. There's
01:08:14like terminology around that, you know, and what I think is so funny is since I'm a financecreator is how much more money I would make if I just raised money and invested in like way moredeals. I would take two and 20. I would take 2% of every dollar up front and I would take 20% ofall profits over a hurdle rate. And so that is a very easy billion dollar play. And I shouldn'tsay easy, a simple billion dollar play that's been done a million times. But actually what'smore valuable for the audience is the ability to learn how to do it. And so I think a lot aboutwhat's the right monetization structure for you as a creator and then for the legacy.that you want to have. I don't think people learn that much or get that much value from having
01:09:02another fund to invest in that has like a five to maybe if they kill it 20% annual return.Like that will change nobody's life. Even people who have millions and millions of dollars.It doesn't change anybody's life except in the business that you're dealing with employees that you have.But if you teach people how to do it, then it can change somebody's life. That's why I do it this way.But to your point on Mark Sisson, I've thought a lot lately abouthow do we give them the mayonnaise, how do we give them the salad dressing, as opposed to tell them how to do all of it in a way that's easier.And so now we're starting to obsess on this problem too, and I'm going to harass you on it.All right. So basically, you're the one of you who's built a giant business and never left your hometown.
01:09:47I love hearing that. I think it's really cool to think about how to do it online and with these sort of drop-ins.And in a world in which increasingly you can do work remote and small towns can really benefit,I think, from companies like ConvertKit being in those local ecosystems.It's a cool model for somebody out there listening.If you're in a small town, to not feel like you have to leave it all behind to build something huge.So thanks for sharing your story like this, Nathan.Yeah, thanks for hanging out.All right.
01:10:20So now we can transition to CEO Storytime.And I'm really excited about this because we had a conversation before this.And you were saying you actually had some regrets about hometowns, your thoughts on them and yourexperience. I'd love to hear those on the show. Okay, biggest regret. I don't have many of them,but I have one. And that is that I didn't apply to very many schools outside of Arizona schools.And the reason why I didn't is maybe something that you guys can relate to, which is, you know,my parents didn't want me to. They were like, there was a lot of noise around, well, how are yougoing to afford that? Well, you don't want to take on student debt. They're probably right there.
01:10:56and why don't you just stay locally?And so I went to Arizona State, which is known more for partying, certainly not harder to theWest, and it worked out fine.But I always wondered what would have happened if I stretched myself, did the hard thing,even allowed myself to fail, not get into places, and push myself out of the nest earlier.And so one of my biggest regrets is actually not leaving Arizona sooner, not because I don'tlove the place, but because you can't be what you can't see.And what I saw around me were a lot of people staying local in the natural industry that is
01:11:29native to Arizona, which by and large is some component of real estate.And so almost everybody I knew who had any success was in real estate.And that really wasn't that interesting to me.Arizona was also known at the time for these big call centers that people would ship outthere.And that also wasn't that interesting to me.And so I think leaving earlier, you can always come back, but you certainly can'tleave sooner. And so I lived all over the world. And I lived in Santiago, Chile. I lived in Boston,
01:12:00Massachusetts. I lived in New York. I lived in Chicago. I lived in Mexico City. I lived in San Diego.I lived in Dallas, Texas. I lived in Austin, Texas. I lived in San Francisco. I've lived in so manycities I can barely remember. And one of the things that I hope they put on my obituary is that no city wasmy only home, because I really think of myself as an American, not a native to any one place.And so I think you have to have that belief that you are something bigger than the place that you are born into.And once you realize that, you don't have these ties that are usually associated with sort of guilt and fear.What happens if I leave these people behind?What does it say about me that I am the type of person that I would leave?
01:12:36And how will I feel when I say that I am somehow better than others that have stayed in the same place for all of their life?What does that say about me?And I don't think we should all flee, but I think we should do what, you know, we should do it like the number.warmans do, which is like send the kids out, let them experience the world, adventure a bit,and then come back to where you are if you want to. But make sure that you have those like earlyexperiences. You know, I do have a question that's actually not on here. And it is about like anAtlantic article. And I believe it came out a few months ago. And it did talk about like happinessin relation to how close to we lived. And we had a tweet that we just didn't read on here,
01:13:15talking about how a woman lived in Sardinia. She's almost 100. She lives around her friends.and she's extremely happy.And basically the stat in the Atlantic was like,I believe, by the way, this is a study that was done by, like, Harvardin conjunction with San Diego or UCAL San Diego, I believe.But basically, friends living within one mile of each otherare 25% more likely to feel happy.And their friends have a 10% chance of feeling happier too.
01:13:43So what are your thoughts on moving from all those placesand, like, your internal happiness?There's a fun thing we should do with statisticswhenever they're told to us, which is, we should say, 25 or 10% of what?And so if it's like, well, 10% happier of the 5% that is normalized, well, that's notfucking work with it.And so I think we have to dig into statistics, just by and large, a little fun asidefor any of you economics and statistics nerds like me.
01:14:10My belief is typically the people that you are raised with and born alongside are not of choice,of chance. And so you surround yourself with humans because you happen to live in a house next tothem, not picked by venture capitalists, but just picked by your parents and chance and time.And so when you actually grow and you are systematic about choosing your own friends, not becausethey happen to be in some school alongside you, I have to imagine that those relationships aretighter, stronger, and more propelling. And so the friends that I have today are ones that arechosen. And because of that, those friendships tend to be really deep. The second thing I'll say is,I watch my husband, who was in the military and went to the Naval Academy. And friends that are
01:15:01forged through difficulty are incredibly strong bonds. It's really interesting when you haveshallow friendships based on those you went to school with and where you are locally. Have youever had those conversations where you sit with somebody that you went to high school with? And what do youtypically talk about the past. How did it used to be? Remember that one time. You're not thinkingabout the future. And so I would push back on this article and say, absolutely, you want friendships andclose associations, but choose them wisely, cultivate them like you would a garden as opposed to aslew of weeds that just happened to be grown there. And if you do that, something kind of magicalhappens, which is that you find humans that are lined with the things that you actually like
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01:16:44See Golden Nugget Casino.com for D.T.Tales. Please play responsibly. Yeah. And I also, I guess on that, I also have another question justtalking about hometowns. So I've noticed, especially since the pandemic hit, maybe this has to do withthe rise of like cottage core stuff on the internet. People are moving to smaller towns,which is like what we've been talking about and romanticizing their lives out there.I went to Hudson, New York recently. Two hours outside New York City, cutest place ever.Could totally imagine myself living there. Do you think like with the rise of people kind of normalizingliving in places that aren't these cities like Austin, S.F. New York, that people are going to start
01:17:20staying in their hometowns more. That'll be interesting to see what happens. Seems to me that yougo to population dense and opportunity dense cities to start, grow, and proliferate your abilityto have optionality, aka I'm not sure what I want to do, but I want as much option, as many options,in order to do it. And in order to get that, you can't do that if you're in Waco, Texas, typically,or if you're in Piedmont, North Dakota.Your optionality is going to be limited locally.And perhaps because of the internet, you have wider optionality, but still that hand-to-handcombat is really important.
01:17:55And so I imagine many of us will be in population-dense cities.And then as we establish ourselves, our credibility, we already have our networks,then we can move out more remote.And we will have this cycle again with our children.So our kids will grow somewhere that they will need to leave in order to have the nextstage of growth. But yeah, I mean, I think all of us, I was just texting a group of friends yesterdaywho are all like high-performing women, Emily Fricela, who, you know, is married to Andy Fricela offirst form and Gabrielle Lyons, this badass author and doctor and Lela Hormozian. I was just texting
01:18:31them like, is there something wrong with me that what I'm really into right now is like buildingan empire, getting a six-pack, being happily married, and I'd like to decapage these pumpkinsbecause I found this fucking adorable thing on Instagram. And so I think that idea ofnostalgia and small town living is real when we are stuck all day with our faces to a Zoomscreen. I would just say, don't do it before you've achieved the things that you want to achievebecause if you move towards that too young, I've seen a few things happen because I have a fewyears on you, for instance. I watched my girlfriends in Dallas, Texas, get married young,move sort of remote, focus a ton on just their family and marriage and things like Decapaji
01:19:14pumpkins. And I would say about 60% of them are now divorced. And they're trying to figure outtheir next stage because they didn't have optionality young. And I think a lot of them didn't do itbecause they wanted to do it. They did it because they thought that's what you were supposed to do.And there's no right or wrong. Building an empire fucking sucks often. You know, running a familyand being married can suck often too. And so no right or wrong, but just make sure that you're notdiminishing optionality too young. You want to have, I sort of think about it like when you go out and youmove rural. You have to think about the number of human interactions you have every single day,and then think about those number of human interactions as network points, sort of like nodes
01:19:53that we talk about on electronics. Well, you want as many nodes as possible early becausethose nodes then connect to other people. And every time you have some sort of singularinteraction, it inspires something. And so I like to make sure that people don't limit themselvesway too early. No, that makes a lot of sense. I think that's really good advice for young people.Now, that said, I had something that I thought, if you guys will let me, I would read to you all today.We have a newsletter called Contrarian Tinkering that's basically like my little thoughts of the weekbecause the truth of the matter is, do you? There's no such thing as should. There is only a such thingas want and need. And very few things are needs. Breathing, eating, paying bills, taxes,
01:20:35and dying is about all I got. And so if you don't want to leave your hometown, this is not an episodeto say that you should. I really hate the should word. And so I wrote a little love letter to my hometownand I thought I'd share it with you. My Arizona is different. It isn't the green golf coursesladen with tourist traps. It isn't the Scottsdale made for partying and spray tans. It isn't thebetter tax code and the Californian scrambling. My Arizona is wild. It's thunderclaps so loud,they shake the house. Heat so hot, your shoes stick to the asphalt. Rain so heavy,the smell of creosote rubs off on you. A state where the very electricity in the storm sets your hairon edge and the dust storms are so big they block out the sun. We do nothing halfway. We're not a 40-mile-an-hour
01:21:16crew. We're zero to 120. Whether it's our gun laws, our real estate market, or our hot sauce, ain'tnothing mellow around here. The Texans like to say that they're the toughest in the West. Well,Arizona's where Geronimo surrendered. It's the land where the OK Corral saw the Wyatt Earp battle,the land where the West didn't need 10-gallon hats. I'd give those big sky lone star statesa run for their money. A seemingly little state with a big attitude, that's my Arizona.Just because it's a land you left doesn't mean it's a land you don't love. Never confuse the two.All right, that's a wrap on today's episode. I hope you gained a little piece of wisdom, perhaps,about what it means to travel beyond the places that you've known before and the person that you
01:22:01were when you lived there. If you liked this episode, give us a little love. You know what we'll do?we'll give you 10 of my favorite little snippets if you write and review the podcast.Link is in the show notes.And if you DM us on Instagram at Cody Sanchez, I will make sure that you get my little diary that nobody else does.Tell me if you end up leaving your home state.All right, that's the deal.Don't be a deal breaker.Make sure to review the show.
01:22:27See you guys next week.Have you know that I got it, don't need to look all in a bag.
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