My First Million - A Masterclass On Flipping DTC Brands For Millions With Mehtab Bhogal

Episode Date: April 4, 2023

Episode 439: Sam Parr (@TheSamParr) and Shaan Puri (@ShaanVP) talk to Mehtab Bhogal (@MehtabKarta) about how to flip direct to consumer brands to earn millions of dollars, underrated companies, Oprah, and more. Want to see more MFM? Subscribe to the MFM YouTube channel here. Check Out Sam's Stuff: * Hampton * Ideation Bootcamp * Copy That Check Out Shaan's Stuff: * Power Writing Course * Daily Newsletter ----- Links: * Sola Wood Flowers * Josh's Frogs * Fast Growing Trees * Schlep Blindness * Corporate Turnaround Artistry * The Messy Middle: Finding Your Way Through The Hardest and Most Crucial Part of Any Bold Venture * Do you love MFM and want to see Sam and Shaan's smiling faces? Subscribe to our Youtube channel. ------ Show Notes: (00:00) - Introduction to Mehtab (11:20) - How old were you when you made your first million? (18:50) - Josh's Frogs (23:50) - Fast Growing Trees (28:40) - What is your differentiator? (30:50) - Hiring Agencies (01:00:00) - Oprah ----- Past guests on My First Million include Rob Dyrdek, Hasan Minhaj, Balaji Srinivasan, Jake Paul, Dr. Andrew Huberman, Gary Vee, Lance Armstrong, Sophia Amoruso, Ariel Helwani, Ramit Sethi, Stanley Druckenmiller, Peter Diamandis, Dharmesh Shah, Brian Halligan, Marc Lore, Jason Calacanis, Andrew Wilkinson, Julian Shapiro, Kat Cole, Codie Sanchez, Nader Al-Naji, Steph Smith, Trung Phan, Nick Huber, Anthony Pompliano, Ben Askren, Ramon Van Meer, Brianne Kimmel, Andrew Gazdecki, Scott Belsky, Moiz Ali, Dan Held, Elaine Zelby, Michael Saylor, Ryan Begelman, Jack Butcher, Reed Duchscher, Tai Lopez, Harley Finkelstein, Alexa von Tobel, Noah Kagan, Nick Bare, Greg Isenberg, James Altucher, Randy Hetrick and more. ----- Additional episodes you might enjoy: • #224 Rob Dyrdek - How Tracking Every Second of His Life Took Rob Drydek from 0 to $405M in Exits • #209 Gary Vaynerchuk - Why NFTS Are the Future • #178 Balaji Srinivasan - Balaji on How to Fix the Media, Cloud Cities & Crypto * #169 - How One Man Started 5, Billion Dollar Companies, Dan Gilbert's Empire, & Talking With Warren Buffett • ​​​​#218 - Why You Should Take a Think Week Like Bill Gates • Dave Portnoy vs The World, Extreme Body Monitoring, The Future of Apparel Retail, "How Much is Anthony Pompliano Worth?", and More • How Mr Beast Got 100M Views in Less Than 4 Days, The $25M Chrome Extension, and More

It will go down as one of the best private equity deals ever. Over the 19 years, they put $226 million in to Weight Watchers and got $5.37 billion out, 4.7 billion of realized profits. All right, what's up? We are back, and we got another episode. We got a guest here today. Matab is here. He's a friend of mine who most people, I think, probably haven't heard of unless you're in the DDC world or you're on Twitter or you know what's going on in that area.

but I want to introduce you because you're somebody who, A, has helped me a bunch with my DDC brand. You, like, know a bunch of tips and tricks and hacks and shit like that. So I'm like, I basically have a little scoreboard in my head and everybody's attributes are there. And in yours, it was like business hacks was like filled up. And then the other thing was that you, I don't know if you listen to the show regularly, but you would send me little nuggets of like, oh, you should talk about this. You should talk about this. And so I kind of got confidence.

I was like, oh, I think he's just got his back pocket. full of interesting stories that are off the beaten path. And so I kind of like that. Do you listen to the show first? Let's start there. Yeah, all the time, almost religiously. So my go-to shower podcast. Oh, that's perfect.

We are the number one rated shower podcast in the country, actually. Millions of men lather to us. So Sam, I sent him a picture of the Vancouver show where like the stadium or like the theater was filled up. And he goes, wow, that's a lot of virgins. And I That's hilarious. So true.

That's a good friend. My fiance listens to the show religiously too, and she wouldn't use chat GPT when I told her about it, maybe a month or two ago. And you guys mentioned it the other day, and she was sending me screenshots. So you guys caught her using that. Dude, the Darmesh pod.

I think you're referring to the Darmesh pot. I've been using it all weekend after talking to him. I implemented a lot of the stuff that he was talking about. Man, he got me hyped up. Also, what a lot of people don't realize this, is Darmesh pods always get tons of views on YouTube and finally, Sean, like, texted Darmesh in a group chat and was like, hey, Darmesh, what are you doing?

And he goes, oh, nothing, really. And I go, really? And he goes, well, I'm just doing a few things. And he, like, gave this, like, very detailed list of, like, internet marketing, not hacks, but he was like, I'm just like testing, like, buying ads, like $500 here just to test this. And then I'm, like, responding to comments, just like the small stuff that you wouldn't expect someone who runs a $20 billion company to like be doing.

And it's very tactical. We don't even do it with our own podcast. We don't do any of this stuff. Like people are like, oh, the thumbnail, the title. People don't realize we don't see those. We don't approve those. We don't know about those. We're not involved in it.

We don't do a lot of this stuff that we probably should. But, you know, can't be bothered to do all that stuff. But he did. He did do it. They say the devil's and the details and I ain't trying to hang out with him. he's the man like he was like oh i'm not doing anything then he had this like really long list actually mate have you said a phrase to me the other day i called you and you said a phrase that i stole and i've just been saying all around town i've just been saying it everywhere even when it's not

really appropriate because i thought it was so funny sam i was talking to him and i was like oh you lived in like you're living in Utah why Utah like you're aren't you like Canadian and you're like Indian, like, what's going on here? And he was like, he's like, oh, yeah, my wife, something, something. And I go, I asked you something about your wife. He goes, he goes, yeah, you know, he goes, yeah, you know, I looked like I got beat with the ugly stick, but somehow I ended up with an awesome looking wife. And I thought that happens. It happens. It's common here. Beat with the ugly stick was so funny. I've been using that everywhere. I use it to refer to my business partner all the time. So, you good. Oh, you take him down with you?

Oh, always, yeah. He's my go-toe. I don't know. I googled him. He's pretty handsome. How old are you? I'm 29. Wow. You're interesting because he does stuff that like, you say words that most people don't say. So I pay attention to vocabulary. So for example, in the tech world, me and Sam used to live in San Francisco, and you couldn't go outside.

You couldn't poke your ear out the window. You wouldn't hear the word, Ibida. Nobody says Ibida in San Francisco. nobody knows about it, nobody talks about it, it's not a thing. But then when you get into like the cash flow business kind of world, that's all you're going to hear. A bunch of different people talking about words that have to do with profits. You say a bunch of other words like, dividend recap, distressed buyout. And he talks about all these things that I frankly don't know what they mean, what they do, how it works. But I know that you come from a little to different

world. So I'm excited because I want to talk about some ideas from your neck of the woods, It's your part of the business world that is less of stuff I'm less familiar with personally. And so I think I'm going to learn a little bit. Where do you want to start? What topic should we start? Are you set to dock with some things? I want to look at some of these. Let's start with one that we have.

Well, hold on, Sean. I need a little bit of background here. So you basically, like I read your medium post. So if I understand this correctly, the name of your holding company, you guys buy into or you buy entirely outright. distressed or only okay performing D to C brands and you make them great. Is that the summary? Yeah, that's the gist of it. And we're less of a whole,

kind of more of an independent sponsor, if that makes sense. And that just means you do everything on a deal-by-deal basis. So the equity that you're working with might be very different on a deal-by-deal basis. That doesn't make sense. I don't understand. What do you mean when you say sponsor? So it just means that we're the ones making the investment and say on one deal,

Sean's a co-investor with us. and then on the next deal only Sam's on the cap table with us. And you run it or you hire CEOs or what? It depends on the portfolio company. Right now, I am day to day with one of our portfolio companies. And how many do you have? Like seven, I think? No, there's three platform companies.

And then there's another eight to ten kind of minority equity and depositions that we have. And the whole thing is roughly of what size. So me and listeners understand. The core platform companies, which is what I would count as part of the revenue. because we own the majority of those companies is well in the eight figures. It's kind of that mid-eight figure range. And is the biggest one, the Flowers Company?

No, that one slightly smaller than the succulent company, but the flower company is the one of most bullish on. That one's solowoodflowers.com. And that's just because there's a lot of room for margin expansion yet. What's that called? That's the one you talk about the most. So let's give, you said three platform companies. So you said a succulent company,

a solo wood flowers. So it's like a, a wood or fake flower company, correct? Made in our other land, Sean. Yeah, exactly. So made in India. People buy them for like weddings and things like that, right? Because flowers are super, super expensive at weddings. And so these look really good, but they don't cost as much as fresh flowers or whatever.

What's the third, like, majority owned company? That one's an apparel company. An apparel company. Okay. Yeah. And so you own these three. Let's talk before we go into the details about each of these. I want to know the origin story

because you've told me some interesting things like I think you met your co-founder on Reddit like in a subreddit and so take us back go all the way to I see here something about about getting sick at 17th

start there and then tell us the story of how you got to this spot now when you're 29 years old. Yeah so the quick and dirty version is essentially diagnosed with spinal stemosis and degenerative test disease when I was 17 so that meant you know

obviously doing anything physical for work was kind of out of the picture. So I decided to learn more about e-commerce and entrepreneurship and just kind of stumbled. I started a Facebook page called Guitar Porn. And this is back when organic reach was awesome. You know, you post something people would actually see it. Facebook blessed us with so much free organic reach. It was the greatest time ever.

Almost like TikTok is now, right? And then I transitioned. I started doing basically guitar runs, like semi-custom guitar runs with big brands. and we'd partner with a retailer or a dealer. This is before brands would work with you directly, right? And we would sell out these pre-order runs and basically take the cut. Eventually, we cut out the retailer and became the retailer ourselves. That got to kind of low seven figures.

That was nice because there was no CAPEX. So we didn't have to have much cash, right? It's all pre-orders. After that, I started a mentor product company, which is really ironic because I'm Sikh. So I don't cut my hair and have a turban. And so did that with one of my best friends. that also scaled the kind of low seven figures, along with a guitar pedal company that scaled the low seven figures.

And then after that, I decided, you know, these are all fairly small, like TAMs, really small for niche guitar pedals. So I decided to start investing, realized, hey, you know, no one's going to come to me, just given up nobody. You weren't even doing guitars. You were doing guitar pedals specifically.

So the first company was a guitar retailer, like actual full-blown guitars. And then, yeah, the one that was really profitable was guitar pedals, just because the margin was insane. And I partnered with a guy who I'd met flipping guitars, like just trading guitars with. And he was a Grammy-dominated guitarist, right? He has.

He plays a band called Peripri for any metal nerds. And so that went well. Like, those were both flowing well in terms of cash. They're just such small opportunities. Were your products any good? Or were they kind of, you were just good at the marketing? Because that's my kind of rub with a lot of DDC companies is they have pretty shitty products, but slick marketing.

No, the products are awesome. something. I mean, I have like 30 or 40,000 posts in guitar forums by the time I was 18. So I really was into guitar. He's played six to ten hours a day. So I definitely knew what it took to make a good product. Okay, cool. Yeah. I mean, like a lot of these companies, like I'll see I'm like, dude, these are shit or like this is some Alibaba crap that just wrapped up in something a little bit nicer, but it's still pretty crap. Like there's no R&D like made it a superior product. You know what I'm saying? Especially with like a lot of the cosmetic stuff, like lotions and stuff. I'm like, I don't know, man. This is kind of crappy. So did you go to

college? Because it sounds like you were doing these when you were like 18, 19, 20, 21. Is that right? Yes, I was in school and then I dropped out. It just didn't make sense to stay in school. What did your Indian parents think about that? They were not big fans of it. That was, yeah. What was your dropout point? Was it like, I'm making X dollars and X was just like too big or you just didn't have the time to go to school? Why did you drop out? It just didn't seem like the value was there relative to who I had the opportunity to interact with on the business end. and it just seemed like there was more opportunity there. If that makes sense, then obviously I was doing okay in terms of cash flow.

So how old were you when you made, you know, this podcast called My First Million? How old were you when you ended up making your first million? In cash or equity? Yeah. I don't know. I would probably put it like mid-20s, early 20s, like 24, 25. And so you did that through these kind of like smaller e-com things. And then how did you get into this kind of like,

private equity style thing where you go and you buy these distressed companies and you turn them around. So how did that happen? Yeah. So in the Great Recession when I was a kid reading about it, I always thought it was interesting reading about the private equity firms that made money no matter what, like if the company did well or it failed. And I thought, hey, that sounds great. I hate being an entrepreneur because obviously if the company doesn't do well, you fail, right? And that's still the case.

It's not like, you know, it's just not as black and white anymore. So I started, I just realized to tell me. Explain that. Why would it work whether the company does well or not does well? Explain how that works. Yeah, we can jump into that a little later, but part of our thesis is essentially investing on how much liquidity or cash the company can generate in a short-term basis. So if you can invest today and pull most of your cash out within two or three months, there's a lot less risk, right? Versus say you bootstrap something new, you're always putting more and more cash on the working capital side. You need to fuel growth, right? If you're doing a traditional consumer brand. It's less of an issue for something asset light like SaaS, right?

But that's the case. Then you don't actually end up pulling cash out of it for so long. So where most people focus on equity appreciation, you guys focus on liquidity, you guys focus on how quickly can we pull cash out, whereas most business people just think, how do I make this worth more, which often results in putting more cash in?

Is that correct? Right. And that's just one facet of it. We're okay with holding to the long term or being more long-term focused, if it makes sense. And sometimes we're just, of a short-term partner. And like it's not uncommon for a software company to sell on the low end for

three times revenue on the high end if it's fast-growing 10 times revenue. What you just said was you're going to buy a company for basically one-six times because you said you want to get your cash in. I can't do that math, but you want to get your cash back in two or three months. So you're buying it one-six times profit or cash flow. I mean like like nothing. So give us a give us a sample deal economics in a situation where that happened. Yeah, so we invested in an adult health and wellness retailer,

which is a nice way of saying sex toys. I'm in Utah, so, you know. Why don't you ever say the name of the brands? Because you don't want to talk about it? Well, if they're distressed, it's just kind of Yeah, just culturally kind of mean to them. So I'm not like that. And I can send them over. I think I shot them over to Sean.

But yeah, so we invest essentially at, I'd say a fairly far below market valuation, just because others were unwilling to invest in that kind of company. And this was 2018 back when it was a little bit more taboo than it is now. Now there's a few publicly venture-funded brands like Dame, etc. In that space, so it's become more socially acceptable. But we got in far below kind of market valuation. Give us a sense.

So revenue was about X and then what was the distress? Why was it distressed? They had too much inventory. They had a debt problem. What was the problem? I would say it was more of the case of really bad margins. And there was a clear case to improve those margins. They were just originally a drop shipper.

They're doing like six million a year. This is one of our first deals. So they're very small. They're only doing six million a year. And I'd say market for that, for valuation, like the growth equity side would have been like 10, 15 million. As far as valuation back then, we got in at like one. And then the company paid us a royalty until we were,

paid back in full on that initial cash investment. And then there's a few other kind of structural things going in. But we got involved and we helped boot up their initial ops. Why would a company like that sell for $1 million? If I'm listening, that's my question, right? Like he said they're doing $6 million and normally that's like $10 million of value, but they bought it for one. And how are you just Mr. Charming or why were you able to buy it for that price?

So that one was a minority equity investment. and we got involved really hands-on operationally. So my co-founder, he jumped in and he helped them boot up their physical operations and transition from a drop shipper to holding their own inventory and booting up ops here in Utah. He helped them launch that facility,

make their first few hires, GMs, etc. And then I helped them raise debt to fuel growth. And that kind of took them from that 6 to 12-ish mark. Gotcha, okay. And then we sold our equity just five secondaries to a VC firm that invested later, once that value been created. Okay, gotcha.

So continue on. So you've done some of these. So I want to go back to sort of how did you get this idea? So you read about this. You're like, all right, private equity has this trait where they can buy stuff at a certain price or on certain terms so that they get their money back quickly, whether they, you know, their equity portion is small. They have a lot of debt and they get the money back quickly.

You read about that, but still you've never done that. So how'd you decide to actually go to it? How'd you figure out how to do it? Yeah. So I just started posting on Reddit to try and find initial deal flow. And then I met one guy, just the entrepreneurship one. So I met my co-founder who I still work with now, Alex, through that subreddit. And then I met a lady who was one of the first few engineering hires at Uber Eats.

And she had ended up retiring like eight months after we started working together when Uber IPO. And then the other one was someone with a very traditional background in private equity. and he's the one who kind of taught me a lot about private equity. And you're just, what, building a relationship through Reddit DMs? Or like, how are you, like, I don't meet anyone on Reddit. What is actually happening here? Sounds like you met some pretty high-quality people and actually trusted them enough to partner with them.

Yeah, it's the same way you meet people through Twitter, I guess, right? Just posting, getting to know people. I'd say that the community there is very low quality on Reddit versus Twitter and some other private forums like, you know, YPO, what Sam has going on, right? So there was a lot of filtering to be done, but we did sorts of deal through that. That's how the succulent company was found. Okay, gotcha. Okay, so Sam, what do you want to do for here?

You want to talk a little bit about this, like, flower company thing or you want to talk about other brands that he's got on this list? I want to talk. You have three, well, wow, shit. You have five categories or three categories. You have frameworks. You have interesting ideas and opportunities. and then you have under the radar companies. I would like to start at number one, under the radar companies.

I read that reverse order. Number one, under the radar companies. You have things that I've never heard of. And I'm pretty good at finding these unheard of things. Yeah, so let's start with a simple one. So tell us about Josh's frogs. Yeah. What are these types of companies?

This is one of my favorite companies. There's all the characteristics of a company we'd love to invest in. And I've been trying to invest in it since 2018. But he orange says no. So it's okay, though, I still love him. So basically Josh's frogs does exactly what it sounds like. They, I don't know if you call it farming, breeding. They read their own frogs and they're exotics.

And they also grow the bugs that they eat and they sell the food. But they do all of that in-house in Michigan, and they ship it to customers. So if Sam wants a frog tomorrow, he could order one from Josh's frogs. And they've scaled really cleanly, totally bootstrapped. Josh is awesome. I called him on a Sunday and the guy was catching frogs with his kits. I couldn't believe it. I think he's been doing this for 15, 20 years.

And he still loves frogs. And frogs, basically. Do you know the price of a frog? You know what frogs are going for? Dude, I'm looking at it. I'm looking at it now. I would have thought, like, so you can buy a chicken at tractor supply for like five bucks, like a chick.

Or frogs are way more expensive. And they're not delicious. Yeah, I mean, the frogs here range, the most expensive one is $400. It looks like the average one is like $60 to $100 for a frog. They're beautiful, but like, you know, these are for pets, like people want a pet frog so they go by this $60 black poisonous dart frog, all right? Fair enough.

Later on, you guys should watch the tour of his facilities. It's really cool. And so you like this business because what? So what I really like is the steep ops mode. So no one else, your typical e-commerce guy is not going to go out and boot up a frog operation, right? It's just too intense for them. They don't really like physical things. We have to show up.

a lot of guys just use three PLs, and it requires a lot of specialized knowledge. At the same time, you know that someone overseas is not going to undercut you, and it doesn't become a race to the bottom with monetized products, because you can't really ship a live frog from China or directly overseas to the U.S.

It's just not viable. Thank God. So with that, there's a very strong operating boat, you're only really competing against other companies in the U.S., right? So you're cost-per-acquisition. He's competing against, like, only people weirder than himself, which is... Yeah,

Exactly. Only going to be like three other dudes in the country. Yeah, your CPA. Your cost per acquisition of customers stays consistent. It doesn't really spike the way you see it spike in other spaces. Josh's frogs, Jack's frogs, Sam's frogs, and Herbert's frogs. That's the big four in the frog industry. If you're Josh, if you're Josh, if you're Josh from Josh's frogs, what would you sell this business for?

Or like, what would be the threshold of, okay, this is interesting. I'll take the offer. or I'll maybe take the offer. Yeah, I obviously I can't say what his EBIT does. And if I gave you a multiple, I would kind of tell you what is EBIT does. But I would say there's probably, let's say your average D2C business, his size might sell, and I'll just use a range for 8 to 10X. He would get a premium of a few turns on top of that because of that operations boat.

And it's not something anyone can just knock off, right? Yeah, it's super super defensible. Yeah. Okay, so, and how did you even find this? You know this guy personally or you found it. I meet him. I met him through, I did a podcast on e-commerce fuel. And then he reached out and we just got along.

And I always stay in touch with him. We like to turn it out. We have similar problems for their businesses. So it's fun to discuss them with him like implementing lien, et cetera. By the way, I just read, I just Googled Josh's Frog revenue. So it looks like they're on the Inc. 5,000. So you can find it there. But according to some articles, they're in the range of like $15 million a year in terms of frogs.

I don't know if that's accurate. And I haven't actually researched it. but that's like just some top searches that are showing that. That's pretty wild. Yeah, I think they're bigger than that now. That's wild. There's a picture of him on the About page, and he just looks so happy. This guy looks like he's in frog heaven right now.

I'm so happy for this guy. Just this one picture. Just like, I hope to be as happy as this man right here. This is a good one. I like this. And I think what's cool when you, so invent in the sort of like tech world, all the discussion is always just about like, the future dream, like the dream and state.

It's like, what could this be if everything goes great? And what I've learned as I talk to guys like Andrew Wilkinson or the guys from enduring ventures or you with people who are buying, who want to buy, you know, solid, stable, cash flowing businesses that are profitable. That's not the, you know, it's not the pie in the sky sort of thinking that you get in Silicon Valley. And instead, it's basically what could go wrong? So instead of what could go right? It's what could go wrong if I bought this company.

And that's why people love businesses like this that have this, like, you know, defensibility, this moat. So it's like, no one's going to compete with me, not internationally because you literally can't ship the frog. Locally, you know, the average e-commerce bro is not going to want to like take this on. So who am I competing against? I'm competing against basically nobody, which will let me, which means my business is extremely defensible.

And so it's just a different way of thinking that is less common when it comes to tech, which just sort of like half ask can you grow? You know, can this become huge? Can this become a unicorn? It's a different sort of like mindset altogether. What's another example of an under the radar business that that's worth talking about? Talk about this fast growing trees one. I think that one's a great example.

So similar operations about where obviously they're kind of growing the trees. Again, no one wants to be a tree farmer, right? It's just not sexy. You know, it's going to go out and raise capital to become a tree farmer. Oh, no. That sounds kind of neat to me. Wait, so literally what is it? They sell seeds or they sell the actual tree?

What's going on? Both and the company, I first stumbled across the sim when the company was being sold six or seven years ago. And I think it went for between $100 million to $120 million. And it looks like they've grown quite a bit since then. I wouldn't be surprised if they're worth closer to double that now, just with their website, re-haul, et cetera. They had a very, like, early $1,000. The traffic estimate shows it went from, it's like at almost $3 million uniques a month.

That's pretty crazy for a tree website. Their website says. It says flower. So here's their H1. Flowering trees are it. You'd hate to miss out on the hottest trees of the season. Wouldn't you? Shop now over 1.5 million happy customers.

And so what you see is, I don't know what type of tree this is, but it's like a grown tree that's purple. It does look beautiful. It looks, it's a beautiful tree. And I just think it's hilarious. You'd hate to miss out in the house. Flowering trees are it. That's like, you know, like the Gen Z people like,

he is him. She is her. Have you seen this like this trend? Trees are it. This is awesome. I mean, it's a really defensible business. It's cool.

No one would really expect something like that to be that large, right? And so what do you buy? You buy a tree that's mostly grown already and then they come and plant it? I think you plant it. I think it shows up and then you plant it. Oh, my God. So if you want a tree to like for more privacy, say privacy hedges or something similar, or just trees in general.

This is where you go. How much remedy do you think they do? Get your fix. I have no clue now. Again, I'd be really surprised if it was less than $100 million. And revenue? Yeah, I'd say probably closer like $150.

And what type of profit? What's about net margins would this be? Or net income or EBDA? I'd be really surprised if it was below 20%. Probably closer to 2025. This is crazy. And they probably don't,

they probably aren't buying too many ads. They had a couple of Google ads, But it seems, I bet you this is a type of company that they, I mean, they called their company fast-growing trees for a reason. I imagine that was a search thing. Yeah, yeah, it's an older company. It's been around for a while under a few different owners. I think a private equity firm runs it now. And who would have thought that like, you know, when the internet came out, it's like, yeah, people are going to be able to like buy things online.

It's like, there's some guy out there who's like, they'll buy trees online. It's like, no, no way, no way. Why would I buy a tree online? That sounds like the most far-fetched thing. And then here we are, $100 million selling fast-growing trees online. You could buy this, by the way. Look at this Italian Cyprus. That'd be perfect for the Airbnb, Sam.

Yeah, I am looking at this, and I think this is pretty awesome. Like, they have some beautiful hedges. There's, like, fruit trees. I mean, this is pretty amazing. I understand this. I'm getting to the age now to where I appreciate a good tree. Yeah, this is pretty crazy. Okay, I like this one.

Give us another under the radar business. Yeah, what seems more appealing to you? Well, let's do the Bettys one, and then we've talked about this CSC generation thing, but you have more info on it than we do. So let's do Bettys and then do the CSC. Yeah, so Bettys is a really interesting business. What I love about it is strong IP mode.

So if you go to their website, you can tell it's off. What do they do? It's like a bed cover thing for kids. I actually don't know how to explain it very well. But it may, it's, so your kids can basically change the bedding really easily. But they have it,

it's patented and they have proper IP mode. And when you go to their website, you can tell it's not very optimized, but they've been crushing it, totally bootstrapped, great people, a very healthy EBITDA margin. And,

um, you know, it's a duvet cover. It's a duvet cover that's easy to zip, which I have a zip, duvet cover as well. Duvet cover. are pain on the butt to do.

It's meant for little boys, so that makes sense. So this, they bootstrapped this to 40 million. That's pretty impressive. Yeah, I'm pretty sure it's right around there. Yeah, that's pretty good. And you can tell it's all PMF, like killer product market fit, killer product, killer IP moat. And they've done a really good job with that end of the business.

What do you think are some of the, like, I don't think this is like a, everything can perfectly do this. But I think that when you look at like a software company, you think, all right, so what are the attributes of like a great software company that could scale? You think like, well, they have to have good net retention, meaning most people come back constantly. Ideally, it's an expensive enough product that you can afford to hire a sales team. Like things like this, like there's like a handful of checklist.

And then there's lots of examples of things that don't check the checklist that still succeed. But what are the handful of checkboxes that you have when looking at or building a to see company, particularly things that people don't think are true. Like, for example, like in the cool kid circle, and when you're 22, you want to create, like, you know, cool shit that Gen Z buys. You're, nothing that you've mentioned fits in that category. Right. For us, what we found is the most consistent mode.

And some people are different, right? It's just the moat that's worked for us is that operating mode. So anything that requires physical manufacturing, it has a good reason for that manufacturing to be in the U.S. or Mexico is great. And we found that like, I'm not sure if you guys are familiar with lean manufacturing. It's just like a philosophy behind, I guess, running a manufacturing operation. Toyota thing, right? Yeah, exactly.

It ports over very cleanly from company to company, but marketing does not, right? What worked with your paid ads for a company with, let's say, low AOV, but really fast consideration period. So, you know, something like clothing. I see clothing, I buy it. It's very simple compared to the marketing side for something with a long consideration period. That's very different, different teams, totally different strategy. nothing will really carry over cleanly. But on the manufacturing end,

it carries over cleanly company to company to company. So for us, that's our favorite mode. So to summarize, you want a low consideration period and you want something that can be made in America because it has some type of manufacturing mode. Anything else? Well, we don't actually care about the consideration period.

I think it's just like a natural challenge in any vertical that you get into, right, if that's there. But for us, we only really care about the manufacturing end now. And then obviously the way we enter the deal is really important too. And that just, you know, if you pay next to nothing for something, the odds of making it work and making money on it are much, much higher than if you overpay on entry. I want to talk about this agency stuff because, you know,

the interesting thing about, you know, people like you and the DDC world is they're oftentimes really, really good at acquiring customers because it's kind of like, like the DDC folks oftentimes are pretty good now. Before it was the gaming company. So, like, if you met someone from a gaming company or from the ATTAC world, like, that meant that their internet marketing chops were, like, pretty good. Now that DTC or now that Facebook is harder to buy ads on, the people who are succeeding oftentimes are quite good at that. And Sean and I have a bunch of friends who are starting recruiting companies.

And which is really interesting because recruiting companies isn't new. Outsourcing isn't new, but people are putting sexy new packaging on it. And I guess from what I'm guessing, because you have it on here, is they're doing a really good job or historically they've done a poor job of acquiring customers and you want to apply that to that space. Is that right? Yeah, I just think it's a really interesting space in general. But I think some of these agencies are really heavily focused on, say, the Philippines or other countries in Southeast Asia. We've noticed there's a lot higher quality talent in places like Mexico and you don't lose the same negatives associated with hiring the Philippines are not there in Mexico. So for example, you could build an office out and fly out and be there in person in a few hours if you live in Texas, right? And the wage disparity is not as high as you would think for really, really good talent.

You're only paying a large number, but, you know, it's not actually that bad, a 30% more than you would be for someone who's great in the Philippines, maybe 40% more in Mexico. But again, you can visit them in person, which is really big. You can have them fly out. And again, it's big for us because we do a lot of manufacturing, right? So they can actually understand the product or interact with the team in person. and so your retention goes up, the quality of work is much higher. And we found the quality of applicants

is much, much higher in Mexico too. So if I did start an agency, it would be focused on solely talent in Mexico. And just for example, when we're hiring a customer service role, like a new manager or director, we're getting people who used to head up U-Line. Are you guys familiar with the U-Line?

I just use it to buy like boxes. Yeah, we use it a ton for like when we had our warehouse. Yeah, so their customer service is awesome. but we got one of their former directors. And his salary ask was really reasonable. It was like, I think, $5,000 a month. But his talent was the equivalent of someone who's $200,000 in the U.S. I can't find this client info.

Have you heard of HubSpot? HubSpot is a CRM platform. So it shares its data across every application. Every team can stay aligned. No out-of-sync spreadsheets or dueling databases. HubSpot, grow better. Yeah, you have one agency idea on here that I think is a no-brainer, which is sight speed.

So we have this problem with our store, but I think everybody has this problem. Basically, if you're selling something on the internet, one of the easiest levers and the biggest levers you have is your site speed because if you have a slow loading thing, you're just going to lose traffic. You're going to lose customers as you have a slow loading page. You're also going to suffer in terms of your Google rank

because Google takes into account your page speed as well. And it's really easy in the e-com space to have slow pages because what happens is you start with a Shopify store, you install 15 plugins just to get your Shopify store to do anything because you can't basically run a Shopify store just out of the box. You're going to end up installing a bunch of apps, and each app injects a bunch of code into your page. And even if you delete the app, the code stays.

There's no like, you have to like manually clean that up, which is kind of insane and probably a business of its own. But basically, site speed is a problem that we, I think we've hired three different folks to try to fix our site speed. and all of them, I'm like, they claim to do something. I have no idea really if they're, if they're doing a great job or not.

I don't think that they are because the next guy comes in and says, oh, man, your sight speed sucks. Let me fix it. So I think this is a product that I wish existed and I think could clean up because it's a, it's clearly accretive to the person. But explain your thinking on it. What did I miss?

Yeah. So it doesn't really require much in terms of dev skill. It's not like you don't have to be great at the dev end to actually do most of these changes. And it's almost like a checklist that's very portable company to company to company. It applies very cleanly. So, for example, changing the order in which your pixels fire for Google Analytics, Facebook ads, etc.

You can delay some of those very slightly and dramatically increased site speed, and it won't really hurt the business that much. That's just an example of one quick fix you could do. Or certain apps do not compress images properly. So Judge Me, the review app on Shopify for a lot of sites, it does not properly compresses images. So if you just apply more compression to those images, your site speed goes up at the product display page level

or wherever those reviews are. How would you acquire new customers for this? Honestly, I would probably just go, have you guys used Built With before? Yeah, we love it. Yeah, just go to Bill with full list of websites, make sure they're doing a certain amount of revenue or at least have meaningful revenue coming in.

Just cross-checked out against suddenly it shows traffic, right? Like Alexa or something. and from there, I think you would just pin them with their sights slow, right? Yeah, just cold email, I think is the way to go with this. If somebody out there wants to do a site speed, shop, just DM me because this is a no-brainer.

I'll be your first customer. I'll help you get the next 10. And you could charge purely on contingency too. It's really cool because you can see a black and white effect if you've done a good job. And again, it's really easy to do a good job. It's just nobody specializes in this for some reason.

Yeah, and it's a moving, target. Like, you'll do it. And then like six to 12 months later, they'll need it again because they've installed a few more things. They hired somebody who didn't know how to compress images before putting it up. They started using this new tracking software for heat maps. And then boom, now you need it again because you've gone from an A rank back to a C, C rank on these like these site speed graders that are out there. I'm surprised the site speed graders don't have these agencies. Or maybe they do. I haven't actually looked, but like does GT Matrix or were these companies that have the site speed score. Do they not

offer a button that says, by the way, we could fix this for you? No, they should, though, to your point. It's really easy, especially if all these e-commerce sites are on Shopify, right, it's very much checklist. Yeah, so that's the other move. You should buy that site. You should buy the site speed site that checks the speed, and then just add this button at the end. That's the agency

service to fix the problem. If they don't do that already. That's kind of crazy. How are you how are you balancing your time? It seems like you've got a bunch of stuff going on. And I mean, you know, ideas are worthless, but it seems like a pretty good idea to me. When I'm hearing this, I'm like,

I actually seem like that has legs. You've got a good network. You could probably spin something up fairly quickly and scale nicely. How are you balancing doing everything that you're doing? About 15% of my time, I'm the investment and they're managing our minority equity and credit positions. And then the rest of the time is just spent on the floral business. There's a pretty big lever that we're pulling right now with booting up another operating base,

like a manufacturing base in Mexico. And that'll get our EBITDA kind of $5 or $6 million. And then from there, it's a pretty good valuation. So we just want to get that over the hump. Then I'll probably slowly phase out. But my co-founder is solely involved in that company. And that's the, that's called solo wood flowers. Yeah.

Yeah. Sam, when I met MetMab, I heard what he was doing. I was like, I told him two things. I think I go, how do I invest in this? because if you're willing to go down and move to Mexico and build your manufacturing facility, you're going to win. Like, Paul Graham has this essay that he wrote called Schlep. And he basically describes the guys from Stripe as being willing to do the schlep work.

And he's like, you know, in a lot of businesses, there's basically some amount of schlep that you have to do. And for Stripe, they had to do all this, like, banking stuff that was kind of like annoying and bureaucratic. But they didn't really view it that way. They were, A, they were so young. They didn't really know what all was going to happen. They didn't really realize how much they would have to do. And B, they were just willing to do it. And, you know, you are willing to do the schlep.

Like, you're like, oh, you know, you're like, I'm looking for operationally intensive things. That's the opposite of what I'm interested in. I'm like, I want the least operationally intensive thing. But I get why you would want it because it's super defensible once you have it. It's very valuable once you do it. And it's very simple once it's fully set up, if that makes sense. Once you have like the best practices from lean manufacturing running, It's very simple to keep the manufacturer running versus like a D to C brand that's really reliant on the marketing end, right?

Yeah, exactly. And so I told you, I remember I being like, hey, can I invest in your Mexico thing? Like your facility there? I think that's a great idea. And then I also told you, I was like, man, I feel like you play the game on hard mode. You're super smart. And you are like, I'm going to go do distressed turnarounds of D to C businesses. That's like multiplying three hard things together.

And I was like, why do you do this? You can just, you know, there's easier options. And you were like, no, I like this. I like, you know, I like playing in the mud. Once you get a really good deal, you can't go back. I'm Indian. I need to get a good deal. I need to get a good price.

Yeah, I think that's actually what it is. I think it's genetic that you're like, oh, you know the best deal possible, a company that's burning to the ground. Exactly. You can get it for nothing. You're also, I'm trying to find it. So your website's really good. but you have this blog post

or you have a bunch of blog posts on Medium so Carda Ventures, Carda with a K KKKK. It should be on substack now. I killed the medium. Oh, well, I found it on Medium, but yeah, it looks like it is also on substack, but you're really good with language. So, like, your thing starts

off with like, your first sentence is just good. This is a guide intended to give distressed e-commerce, heavy business to give distressed e-commerce heavy businesses with 10 to 15 million in revenue, a high-level overview of turnaround management basics and resources to dive into. That's a great first sentence. You're telling me exactly what I'm getting. And then you do a

really good job of explaining kind of your background with Alex, your co-founder. You say you started these things in your early 20s. You took passive roles or you sold them. And then you like help turn around ice.com, which is now called ice trends. You met on Reddit. And then you say, we welcome complex opportunities that others are unable or unwilling to tackle. As a result, we can invest in non-control opportunities. We can grow quickly. But you just basically say, oh, here's another good line. My team and I are responsive, discreet, and avoid pointless formalities. We understand how critical speed is both in turnaround and high growth environment, and we can tell you within 24 hours if we're a fit. And so you just do a really good job of being very crystal clear about

what you're offering is, and you are direct, but you're not rude. And it's just a, you have a really good voice. And you also like cite a lot of the books that you've read. So you talk about turnaround corporate artistry. And you have like a quote from the book. And so anyway, your language is wonderful. Sean said he pays attention to vocabulary. So do I. You have really good words. And your, you're, and your rhythm is nice. What did you read to kind of come up with your perspective? And how did you, how did you become a good writer? You're, you're quite good at explaining complex things. I think we all grew up during the era of hardcore. I don't know what it was, but for some reason, copywriting and being into copywriting was really popular from 2010 to 2013, maybe earlier.

What did you learn for that? Or where did you turn to for that? One of my friends was just really into it. So I got dragged into it too and just reading random books. I think there's a compilation of like 100 of the all-time best sales letters. That's back when like people used to distribute swipe files and stuff like that. So you'd just be in a random group and someone would just distribute it and you just rip through it. And that's kind of how I picked it up. It's good. You're very good. And what were some of the other books that you're read to learn this topic because you learn this at a very young age. Yeah, I'd say corporate

turnaround artistry is one of the greatest books ever. But it's written by my mentor, Jeff Sands. And that guy is an absolute beast. He's turned around a handful of fairly large nine figure industrials, like manufacturing companies, everything from bakeries to, I think, large restaurants, the restaurant groups, et cetera. And that guy is in his 50s, I think. I hope he doesn't kill me if I got that wrong. And he just shows up. So he's done like lumber mills, et cetera. He just shows up and turns the operation around within six to 12 months. Absolute machine. And his book gives you, it's probably the most value in a book that I've read in a really long time.

It's just like tip after tip after tip. And you can just take it and apply it even if your company is not distressed. It'll just juice profitability, if that makes sense. Really awesome. But I was just a complete machine. I'm convinced you could drop them into anything and he'll just make it more profitable in six months. And that's because what? What does he like world class at doing?

What does he do when you drop him in? I'd say he's just very fast at making decisions. He doesn't hold back. In a lot of ways, running a turnaround is like running a startup. You don't really have the benefit of sitting around to make decisions, right? Like, you're not going to hire McKinsey to run a full-blown study to see if you should do something. You're just going to go and do it, right? And maybe you have some light directional data, but you're not going to wait for a ton of data.

You're not going to run some crazy Qualtrick survey, right? He's going to go out and get it done. And that's what he's really good at. It's just taking action. He'll show up. For example, when he turned around that Canadian. in lumber mill. He's American. So he just, he moved and, you know, keep mind he has kids, etc. But he still just moved, showed up to a lumber mill in the middle of nowhere, Canada,

and turned it around. He just got it done. No one else will really do that, right? And there's a premium for that. What part of this brings you joy? Why are you doing this other than it that it makes you a lot of money? I'd just say it's really satisfying and it's fairly repeatable. So, and I think the speed at which you learn is really, really good, right? And it doesn't require a lot of equity to keep scaling, if that makes sense. So, for example, you can probably buy a relatively distressed brand doing $100 million for maybe $10 to $15 million in equity. We had, we're friends with Moyes and Suli Ali. So Mois started native deodorant. And I was like, Moise, we're in San Francisco. Why are you selling deodorant? Why not like do software and be

normal and make more money? And he goes, I'm a merchant, man. I'm a retailer. Like, this is just, it's in my DNA. Like I just, I make products and I figure out how to make a That's what he said. I've been working on these t-shirt. I've been working with the t-shirt designer to do things. And now I'm just on the lookout for these quotables. I'm a merchant. That's what he said.

He goes, I'm a merchant. What's that say? It says Carter Cogh. And this is a banana that says IRA, like internal rate of return. That's so funny. Well, and Moyes also said, he goes, my second frame,

or he goes, my first favorite phrase in the English dictionary, distressed asset. And it was funny. But he goes, I'm a merchant. shit, man. And it says, I don't know if it's like a, like an immigrant thing or what it is, but like his, because I know their family also owns homes, like a lot of single family homes that they rent out and they own gas stations. And a lot of my Indian friends and Pakistani friends all do that. They have gas stations, things like that. And I'm like, I don't know, man. Maybe it's just something in the

culture where you just like, you're just geared towards small business. But, uh, yeah. And like, for you, is it the product that you like? Or is it just like, I just like making stuff, something that provides value and I just like optimizing it for profit. I mean, what, What do you think is driving you towards this? Yeah, it's a distress side. It's really interesting because it's like a game of chess. With the existing creditors, the existing cap table, and kind of figuring out how to squish it together to make it work, right?

So maybe you have like really angry senior lender and just convincing them like, hey, you know, give me the position, a decent price. I'll come in, I'll turn it around. And eventually you'll get right-side up, or at least you'll make more than you would just liquidating these guys. And then convincing the guys that you're getting the company from, because they're often really upset, right? Like, say companies during 20 or 30 million,

It's still run by the original founders in most cases, and they'll be really emotional about it, rightfully so, right? So kind of figuring that side out is really, really interesting. Then obviously the operating end, I don't like it as much as my co-founder. He really loves the operating end. But that can be a lot of fun, too, just coming in, getting rid of the bad apples very quickly,

and then building out a team and kind of revising the culture. There's a story of what's the famous hedge fund guy who's probably in his 90s now, but you guys will know how I'm probably. Carl Icon. Yeah, Carl Icon. He tells this story on YouTube and he's like, I bought this company and it was not doing great,

but I thought I could do great. And so we owned like 12 floors in this one particular building. And I just went from in one hour from floor to floor to floor. And I laid off the entire floor. And he tells us story laughing. He was like, it was the greatest thing ever. And the audience was like, why? You know, you're ruining jobs.

And he's like, but I'm making it better. like we're gonna have a better outcome and like I go both ways with that. I'm like, well, you're kind of just, you know, like these hedge fund guys. I'm like, you're just like an Excel monkey and you're just like squeezing every juicy can. You're not providing a lot of value. But I do understand the satisfaction of just like getting something that's not fulfilling potential and achieving potential.

You know what story I'm talking about. Yeah, I know the exact one. What's he said? Did I watch the same video? Did I get it wrong? No, you nailed it. You know that. Yeah, he goes through four by four and he does exactly what you said. And he's like glowing with like, he's like pride.

like, Carl, you're just like ruining these people. Carl, you're blushing. Layoffs just get a hot and bothered. Yeah, he's like, I'm getting a semi, just laying these people off. But yeah, I guess you're kind of in that position. A little bit. I guess it really depends on the company, right? A lot of cases, you have a few really good apples, people left.

We're really passionate about the company. They want to succeed. And then there are last people left. And then you have all these people who are more or less just leaching off of, like, the corpse, right? What do you think about how Elon's done this with Twitter? I think it's great. I think a lot of those people are really self-entitled,

and they have no perspective on anything. In a lot of ways, they're kind of like the modern version of those companies, the 1980s that were really fat and just overpaying executives, et cetera. I don't really feel bad for someone who's making up 100 grand losing their job, right? It's more so people working blue-collar jobs

where they're making 40, 60 grand, and they're working their ass off. I definitely don't feel bad for any software engineer, making 300 grand who's upset. They have to work 10 hours instead of six. I don't disagree with you. I just wish you would be less of an asshole when he was doing it. you don't yeah yeah yeah that was kind of pointless like i think he made fun of someone who is disabled or something that's obviously horrible it's inappropriate and you mentioned something about uh being in

america and how like you know you like things that are in america when i uh does it ever give you like do you have any sense of pride around like creating american jobs because i know on your website you said we've created or saved 200 different jobs in america let alone overseas are you into like that whole made in america thing for like the sense of pride thing or is strictly like this just this if it makes sense it makes dollars yeah i think it's a mix of both i think it really does make sense and i'm i'm i'm Canadian but i'm obviously grateful for the opportunity that exists in the US you know Americans just much more gung-ho about entrepreneurship they're more willing to write a check and just get involved than Canadians are if you go to

Vancouver where i'm from it's a lot of older real estate families they're not really willing to write a check and get into something the way americans are they love taking risk and i really appreciate that about the US yeah man there's a a was the thing I've noticed recently about what I call like the North Star formula for a business. And so I like when you can boil down a plan into like a very simple equation. So let me give you an example. Like Sam with Hampton, I think I texted you this, but I just said 10,000 times 10,000. So you just need 10,000 CEOs who are going to pay you $10,000 a year.

and you have a $100 million business, $10,000 times $10,000. So it's like, can I provide enough value where if somebody's willing to pay $10,000 a year? And then can I get 10,000 people to sign up for that value? Your whole business comes down to that one equation, 10,000 times $10,000. When I met when we were hanging out with Andrew Wilkinson, I was like, how much equity did you put into Tiny originally? And I think it was something like, you know, don't quote me on this, but I think it was something like $6 million. He's basically turned $6 million. into like $600 million, just as round numbers.

And $6 million into $600 million. If you want to be the next tiny, you can just take that thing. I'm turned six into $600. Okay, how are we going to do that? Let's work backwards from that simple formula. Well, I think I would need to compound at 45% annually. Okay, how am I going to do that? Well, I need to buy businesses on these terms at these price.

A formula can be very instructive. We have some friends that just raised $18 million, and we're else like, what do you do with that $18 million? and they go, we're just trying to figure out how we can turn, like the goal is take this 18 million of equity and turn it into 10 million a euro free cash law. It's like, okay, like that's a clarifying equation. And I'm curious to have for you, like, in a best case scenario,

how will this have played out? So like you go to the start. I don't know, how much equity did you and your co-founder put in as like your seed capital to get your whole business off the ground? that's kind of weird for Cardox. We both had a few exits beforehand. He'd sold a company that he got kind of low-eight figures in his early 20s. He'd put a bit of cash.

But we put in, I want to say a couple hundred grand, like two, three-hundred grand, to start making the investments. And maybe you've put in more over time, I'm not sure. But like, whatever that's- We reinvest everything, more or less. Yeah, but like just the out-of-pocket, like, initial, not reinvestments from the proceeds of what you've been doing, but just have you had to take something out of the checking account

or savings account just to recapitalize the business in any way? Or no, it was like $2,300 grand. And then anything else we put in was reinvestments from what that $200 or $300 grand has made us. It was reinvestments from what that $200,000 that we put in initially was. Okay, amazing. So you're going to go from, let's say, $300,000. And like, if this all plays out the way you want, you know, fast forward, I don't know,

10 years or however long you plan to kind of do this, what would be the big win for you? How much would the portfolio be worth for this to be like a, you know, a home run outcome for you guys? Yeah, we are really goal-driven. We're a little bit weird that way, but we both want to tackle increasingly large distress deals. That's what we get pleasure from, I guess, just kind of fun doing it.

And we'll just keep doing it until we don't have fun. So our goal really is get, this floral company, I think, can usually get to $100 million in top line. Like our allowable customer acquisition costs will go up by 30, 40% once we finish with a few manufacturing transitions. Hold on.

So you don't have, you're not gold-driven? What does that mean? I don't even, that's like not English to me. How do you, how do you function without, without goals? I, I just like to do hoodratt stuff. Just whatever is fun, right? Dude, he's like a domic. You're like the dominatrix, a P.E.

You just get, you just get pleasure. You just get pleasure like, like, oh, yeah, you like that. Eben-A. Oh. That's going on. That's my new LinkedIn, some header. You just love the act, man. You just like the act of, you know, someone, you, you whisper,

whisper IRR in your ears, you're going to get weak at the knees. Well, so it's fun because you get to learn from people like you two or hang out with other people that are really interesting. And that's really exciting too, right? But don't you have like a, you know, a lot of people who get in business, they've like, one day I want to make all this money so I can buy, you know, a thousand acres, or I want to create a school that does this, or I want to be able to make sure that everyone in my family never has a deeper medical bills. A dream instead of a goal. A dream.

My initial dream and my co-founder This is before we bet. It just turned out we had like the same target was to make like $5,000 a month. That was it. That's how it starts, man. That's how it starts. Then you realize that, you know,

what I've noticed, I have all the same goals. Hold on. Hold on. What I noticed is, dude, you didn't start like this. I had the same thing. And the goals always change. But you said when you started, you guys have had wins under your belt.

No, no. I mean before that. Oh, okay, okay. Like early on, like what I did my first, first thing. I was like, I'm going to be stoked if I make 60 grand a year. Okay. Yeah, of course. Of course, of course. But what about now? You know, like, what's like the, what's like the vision, the long-term vision that you, you, that kind of keeps you excited? Maybe sometimes it's buying shit, giving shit away, helping your family, whatever. Right. I think getting this one portfolio

company the next level, either selling it or releveraging it, taking out cash, and then raising a large fund is probably like our immediate short-term goal the next two, three years. Dude, that's so, when I was in college. That's so, that's so, not what I thought was going to be. Sorry, go ahead. When I was in college, one semester, me and my buddy Trevor and our other friend, Dan, we had read the

card counting book. This was before the movie came out 21, but the book bringing down the house was out. And we were like, oh, not only are we going to count cards, we decided to create an underground blackjack club on campus. And so we started preparing. And we were like,

and because we had read this card counting book, instead of just doing the obvious thing of being like, cool, let's just invite some friends over to play blackjack at low stakes. Let's see how it goes and we'll go from there. That's how you would do it if you had any like any ounce of IQ in your brain. Instead, we were like, okay, let's go buy this like fancy blackjack table. Okay, cool. Now we're in the hole and we've got this like fancy thing.

And then let's run all these practice simulations to see how bad we could get beat. And then what if somebody comes and count cards? What's our security going to be? We're worried about all this stuff that didn't matter. And we spent, no joke, we spent like the entire semester at college, which is like, that semester cost each of us probably like 40 grand just to be there. And instead of focusing on the 40 grand that we put into being there, we were doing this thing. And I remember one night we were calculating, we were like, oh, my God, if we do this, we could make $3,000. And then we all started giggling like, can you imagine that?

Like, we were like, dude, what if we made $3,000? And we just like, that's $1,000. and each. And we were so pumped about this. And it was like, it just took over our mind, like a mind virus for three or four months. It made no sense. But it was like, you know, it was the humble beginnings of scheming. It was like the, it was the first of many schemes to come with this same group of people. We ended up starting a company together and did many more things together. But like that first taste of the scheme and how hilariously bad your plan and your goals are, like now when I look back, I look back with a lot of fondness on that.

Totally. Yeah, it makes sense. It's always starts small. And then you, where you're like, you bought, you bought the safe to keep the cash before you even had the cash and the cash never came. Yeah, we never even ran the, ran the club because we like, we were too worried about getting kicked out of school because we found out how illegal it was. Well, basically we had one simulation where I was the, again, we were big into these

simulations. And I walked in and I played, I lost $100. And then I go. give me all the money or I'm going to tell people about this club. And I was like, oh, yeah, what are we going to do if somebody does that? Like, at any point in time, somebody could just literally take all the money because there's no recourse. What are we going to do? Call the cops and tell them that somebody stole from our illegal gambling club.

And we were like, oh, this won't work. Before I sold my first company, I was using some type of like mint.com style service. And there was like a thing where you could, you know, you connect all your accounts and it's shows you your net worth and whatever. And they had this option where you can manually add something. So I manually added this really big number. And I would log into this every day like six months in advance. And I'm like, sick.

This is awesome. And I remember like when the money then actually came in, I was like, damn, I kind of like felt most of that joy in that six months leading up. Just like I kind of tricked myself into already believing this was real. The simulation kind of gave me like a lot of the joy. it's pretty cool you can kind of like trick yourself into believing these things are true

and you get a significant amount of satisfaction from that fake thing compared to the real thing. Yeah, because what people want is the feeling. You don't want the thing. If you ever say, oh, I really want X to happen.

Why do you want X? If you just keep asking why do you want that? The obvious answer, why do you want anything, a relationship, money, whatever it is, to have a six-pack,

whatever, it's some feeling. It's a sense of accomplishment. it's a feeling of relief, of less anxiety, less stress, whatever it is. And then you realize, oh, it's not the thing I want. It's the feeling. And then you might be able to get the feeling through literally like faking it. You might be able to get the feeling through something much simpler. That's not going to take you, you know, seven years and a bunch of heartache to get there.

And also, if you've never had that feeling before, even when that thing happens, it'll be your first time having that feeling and you'll suck at it, which is why a bunch of people feel after they get success, they get like kind of, kind of, let down because the feeling wasn't as great as they wanted it to be. The anticipation was better than the result. And the reason isn't because the feeling is actually a letdown. It's because it's the first time they've let themselves try that feeling and the muscle is just very, very weak. And so, yeah, big, big life tip is to realize, like, what you want is the feeling and then start practice having that on a daily basis through, like, much smaller things. Yeah, it works. Metab, you, I'm looking to you on Twitter. You have 5,000 followers. I think that being popular on social media, it doesn't really matter in most all of business. In fact, sometimes

it's like negatively correlated to how popular you are. But in your case, at least I know with Andrew, like when he's buying a lot of companies, having some, like, you know, it's basically being on Twitter is a billboard for him. So when he reaches out to someone, they're like, oh, you know, I think I've heard of you. Fine. Let's have a conversation. For how good, it seems like you're doing and how smart you are, your social presence is significantly smaller. Is there a reason? for that? No, I just don't really like it. I just like to post content about stuff that I actually care about. And I'm fairly open. And then I guess too on the distress side, when you're buying a business, they're more on a forced seller, right? And when you're talking to a lot of these senior lenders,

if you're working with, it's a lot of guys that are in their 50s or 60s, and they're very conservative traditional, like banker types, right? They're not, they don't really care about social media or or anything like that. So I'm sure it does help with deal flow on the growth equity side or buying healthy businesses, but I've just never really been into it. Yeah, I mean, you have,

you do tweet interesting stuff. It looks like, what's a Daniel Rop watch? It looks like a pretty fancy watch that you just bought. I'm just a nerd about like neo-vintage and vintage watches, and then as well as some newer brands, but mostly smaller ones.

It's just kind of, a lot of it's like angel investing. Like if you buy into an early independent brand, which is just like a watchmaker, you're basically going at it. Sometimes they can appreciate and value significantly. And you get a pretty cool watch for the money. Plus, you support a small business.

They'll build you whatever you want. So it's like a win-win. Yeah, your social media is actually pretty cool. I'm going to follow you, but you have some interesting stuff. But compared to some of the stuff you're doing, I know a whole lot of people in the DDC space that are significantly bigger than you and are much more of a little pipsqueak and don't ever walk the walk like you are. You know what I'm saying?

Yeah. Yeah. I know what I mean. Leave us with this example of this Weight Watchers thing. So explain what happened with Weight Watchers. Then we'll wrap it up. Super high level Weight Watchers was not doing so well. And this guy, this tiny firm, not super small, but relatively small, he convinced Oprah to join them.

And they absolutely crush it. That's the very high level overview of what he did. So this guy, what were the numbers? So what did they buy it? I'd have to go pull it up. And then what is that? I'd have to pull it up. Okay. So how did this guy know Oprah, by the way? That sounds like, you know, oh, it's simple. He got Oprah on board. That doesn't sound that easy.

Yeah, 2015 Oprah was a big deal. That's peak Oprah. That's like 2012 Obama. Like, you know. Yeah. That's peak Oprah. So in 2015, he did a deal with Winfrey to acquire a 10% stake in Weight Watchers. Since then, the company's stock has soared by almost 600%. They sold $1 billion of Weight Watcher stock. And Oprah gained. at least 400 million so far. Okay, that's pretty impressive. It will go down as one of the best private equity deals ever. Over the 19 years, they put $226 million in to Weight Watchers and got $5.37 billion out, $4.7 billion of realized profits. Yeah, it's pretty good.

That's pretty good. Not including the stock that they still hold. But they only bought 10% of it? I thought they bought more. I think they kept buying more over time. I thought they kept deploying more and more cash into it. Dude, we have to do a pod on Oprah. I love her.

I grew up watching her. And like, I, I, you know, she's 70 now. I just looked her up or she's 68 or something. We forget, or I forget, like, how big of a baller she is. I'm like just Googling it's like Oprah buys another thousand acres in Hawaii. She came from nothing and she bootstrapped. Like she basically, you know, got her net worth to be something absolutely insane. Yeah, what's her story?

So what do we know about the beginning of her story? born in a really poor town, abused growing up, et cetera, and then absolutely crushes it. And she should run for president. I would totally... I think she was born in like an abusive family. And like, I think there was even like some... She got like pregnant at 14 or something. Yeah.

And I think that there was some like sexual assault or something, some like some, like some horrible, uh, tragic stuff. And then at age 24, I think she becomes like a weather woman or like a, like a, whatever they call it. where you're a news person, but you're not actually in the office. You're, like, out on the street. She did that.

And then eventually, when she's, like, 32 or 33, she gets a talk show. But it's not like a hit right off the bat, but it slowly starts picking up. And then eventually she, like, makes some, like, groundbreaking deal. She did, like one of these groundbreaking deals, sort of like Michael Jordan did with Nike,

what Lucas films did with Star Wars, where it's like, you know, we'll just take a percentage of the upside. And then that, like, turned out to be, like, one of the most, you know, one of the best deals of all time. And it's worked. out. And she did this all back when people were very, very racist. It's how like now.

Yeah. I think it was out of Nashville, Tennessee that she's doing this. So in the South, and she kind of killed it. We need a How to Take Over the World episode on Oprah. What's going on? Where is our, where is our definitive Oprah episode? Why have you not done this already? It's a real question for you, Ben. Put it on the list, Sean. Put it on the list. Put it at the top of the list. Let's do this after this episode is done. You got it I'm buying my Oprah I'm on Amazon.com buying Oprah biography Is there an Oprah biography?

I would totally buy that Of course there is There has to be I mean she's she's the best I'm a big fan of her And she like did this all out of Chicago So I think she still owns like The penthouse and the Sears Tower

Which is like you know One of the largest buildings In the world But no she's the best You know I always forget about this It's like I'm in Austin And there's all these nerds talking about crystals You know you go to a therapist

And they like recommend a crystal Like there's like pretty woo woo-woo shit out here she was pretty woo-woo but for some reason she made it very very likable like you guys remember that book The Secret where it's just like it's like if you think about it enough and like putting it in place in your brain the universe will grant you this yeah and like she like

would she was talking about that stuff before any of that stuff was even popular and for some reason when she does it it's very tasteful other times my friends do it it looks like you know they're one of those women wearing like a Coachella brown hat like, you know, and it's not cool at all. You know, I'm talking about those wide rib hats, but I ever see one of those with turquoise jewelry,

I run away. I'm out. Good choice. You know, if you're wearing cowboy boots, if I see turquoise, I'm out. Yeah. No vibrant hats for me. I'm out.

If you wear one of those things, I'm not part of this. But for some reason, when she does it, I'm in. Well, that's what I want to know. Like, I think the story I've heard is, like, grew up in these terrible conditions, overcame, and, became super successful. But I literally want to know, like, what was the successful part? Like, meaning how did she get her break? And then like, what led her? What was she doing? Was it literally just better content? Like, was she just that damn good and dynamic as a talk show host?

Was it like the Microsoft IBM deal where they like, you know, how do Microsoft take over the world? It's like, well, they cut this really great deal for the operating system where they could be, you know, with multiple providers at once. And they use IBM to bootstrap. And that's how they got bigger. Like it's like was there like a growth hack? Was there a smart deal that she struck? Was it the timing? Cause like, you know, those shows, you know, cable started spreading into every home in the country. And like she was one of the top three shows and just like she got to surf the cable wave or whatever.

Like I want to know what actually led her to the mega, mega fame. What were the actual those those things? It's not like a simple answer. But that's what I'm actually curious about. you could like in the air in the topics that I know about um those stories are always the most interesting and I feel like when you when I go into other topics like I was like oh may tab like what happened he was like oh started off bad now the best it's like yeah but act two the middle part that's the part anybody who actually wants to make shit happen in their life you want to focus on act

two like Hollywood focuses on act one and three right like the the bad origin and then the happy ending but it's the montage, the training montage when you go from like scrony to strong, the training montage that they speed up through is the part where all the interesting shit happens. I already told you, Gino, I go, Billy the Week on Wednesday. Oprah, I'm on it.

Yeah. There's this really cool book called Messy Middle. Have you guys read Messy Middle? It's by, what's the, Scott Belski. The most dreamy guy of all dreamy guys. Scott Belski is the man. Scott Belskiy basically started And there's a guy named Scott Belski.

He started Behance, which is where developers could host their portfolio. He started it, bootstrapped it, had $175 million exit. Before it became very successful, he said he had like $50,000 and he invested like $15,000 into Pinterest at a $3 million valuation, $15,000 into Uber at a $3 million valuation. Each of those, you know, $50 to $100 million outcome. Plus he owned 75% of his company when it sold for $175 million. So very, very, very, very successful. Now he's, it's looking like he's going to become the next CEO of Adobe.

So huge deal. He's got this awesome book called The Messy Middle. And it talks about how, like, you know, starting things can be somewhat easy. But once you start that, then there's, once you start it and there's the middle. And you have the end. And the end's the kind of the easy part. You know, things are just kind of working. But the messy middle is that 10 year period where it's like, is this working?

Is this not working? It's a really cool book on how to like navigate that period. And it's, and I love that title. messy middle. Yeah, great title, great guy. He came on the pod once a long time ago. We should bring him back. But yeah, he's on your like Mount Rushmore of dreamy dudes. I feel like you got Huberman up there. You got Belski. Who else? It's basically like successful and good looking. Yeah, you got to have, yeah. Jaw lines. Yeah. Yeah, you need a good jaw line. And a clear cut jaw. Dude, have you seen Scott Belski's jaw man? He's got a strong chin. I know. I don't. I don't.

I'm Googling after that. Talk about not a distressed asset. That guy, chisel. Yeah. That's a blue chip stock right there. Yeah, he also just dresses well. And I feel like dressing well is this like really easy thing to do that nobody does. And he does an amazing job of it.

Especially in tech. I know. He's the man. Because he lives in New York, dude. All those guys are stylish. He lives in New York. So he's got that leg up. Dude, I've never been to his house.

house, but I've been to his house. I know exactly what a guy like that's house looks like. It's basically, I can picture it so clearly in my mind of how immaculate, like, the design is of that guy's house. He invested in the hustle. He wrote us a very small check, and I got the paperwork for where to send the docs to. Immediately, I looked up and I like saw the house, and I can tell you, I can tell you all fair. It's exactly what you're describing. You didn't even describe it other but then you see some big words. And it's exactly all you're described. The funny thing is I tried to in 2018

when we were hunting for deal flow. I stumbled across the hostel. I'm like, this is awesome. I should try to invest in this. So I message you on Facebook, but no reply. Oh, I'm sorry.

You should go pull it up. It's just kind of funny. This is your revenge moment. No, sorry, sorry. It's kind of funny. If I would have got, that would have been an investment, but.

It would have. I'm sorry. And maybe you would have known Scott. You know, I could have helped you connect with my, with my boyfriend, Scott. Maybe you too could have Zillow in Scott's house.

Wow. That's it awesome. Yeah, we're not, we're friendly. We're not friends, but we've, I've Googled his house. He's not Googled mine. Yeah, I can tell you what type of couch he has, though.

But, dude, thanks for coming on, man. You're awesome. I'm going to go and find that. I just pulled up Facebook. I'm going to find that message. It's just kind of funny. It's from 2018. It's like, hey, I'm an angel investor.

Please let me invest. I look what you're doing. Does your last name start with the B. Yeah, Bogle. If you just type in BHAGL. Oh, yeah, I see it. Sorry about that. See, good deal, flow.

Would have been there. Should have messaged you more. Should have harassed you. Dude, I saw a post on Reddit yesterday. It was a map. I don't know if this might be fake news, but it was one of the most popular posts on Reddit yesterday. It's a heat map that shows the average life expectancy by town.

and there's literally a 20-year age difference between like New York, California versus like the South. It's like, you know, people in the South are dying at like 60 something and people on the coasts who are living like, you know, sort of the yoga and salads lifestyle are living until they're 80 on average. And then you can see these small pockets like in Florida.

It's like the retirement community where people like migrate into. Yeah, like Jewish New Yorkers. Yeah, the Jewish New Yorkers. moved down there. They're living for a long time. Everything around it is surrounded by the walking dead of people who are going to die at 60 something. And there's like, it's like Boca Raton kills it. And then like Jort Lauderdale is like as a 30 year shorter life expectancy. I asked my data guy. I said, please overlay a map of Chick-fil-A's. And it was a perfect sequence to like to the dying early crowd, which is unfortunate for me because I love Chick-fil-A.

chickley's not healthy oh we're screwed dude thanks for doing this we appreciate you yeah there always thank you thank you